Microsoft refused to more‑than‑double an existing compute‑lease at a Texas data center with UK AI start‑up Nscale, aborting a potential expansion deal worth up to several tens of billions of dollars. Without Microsoft as an anchor tenant, Nscale must secure new customers for the Texas facility or risk losing billions of projected revenue and jeopardising its $35bn IPO plan. Local political backlash to AI data‑center construction — which affected some midterm results — and calls by incoming Democ

Microsoft refused to more‑than‑double an existing compute‑lease at a Texas data center with UK AI start‑up Nscale, aborting a potential expansion deal worth up to several tens of billions of dollars. Without Microsoft as an anchor tenant, Nscale must secure new customers for the Texas facility or risk losing billions of projected revenue and jeopardising its $35bn IPO plan. Local political backlash to AI data‑center construction — which affected some midterm results — and calls by incoming Democratic governors in states including Texas for immediate development pauses add permitting and regulatory risk to future capacity plans.