Microsoft has declined an optional 700-megawatt addition of AI computing capacity at Nscale's planned Texas campus, according to Reuters, leaving the existing agreement in place.
Reuters based its report on a person familiar with the matter and said the Financial Times had first disclosed the decision. The source said Microsoft made the call months before Nscale's September 2026 IPO filing. Nscale was discussing the unused Texas capacity with several major customers, the source said. The Financial Times estimated the option might have been worth tens of billions of dollars to Nscale, Reuters reported.
Nscale's September 2026 filing with the U.S. Securities and Exchange Commission said statements of work signed with Microsoft from September 2025 to April 2026 provided for payments of up to $43.8 billion through December 2033. The amount excludes optional extensions, and payments are subject to delivery and service availability.
As of Aug. 31, 2026, Nscale reported $103.4 billion in active and contracted total contract value under long-term take-or-pay agreements. Of that total, $2.6 billion was active total contract value.
Nscale's October 2025 announcement described an initial Texas campus of about 240 megawatts with roughly 104,000 NVIDIA GB300 GPUs. It said Microsoft service was planned to begin in phases in the third quarter of 2026. The plan also gave Microsoft an option for another 700 megawatts, with that phase scheduled to start in late 2027.
The Texas decision is separate from Microsoft's exit from Nscale's planned Essex AI data center. Reuters reported in October that power-connection delays at the Loughton project pushed its expected supply date into the 2030s.
