Microsoft tightens oversight of neocloud data centre projects, pulling back from Nebius, IREN and Nscale deals

Microsoft is tightening oversight of data centre projects run by neocloud providers Nebius, IREN and Nscale, according to a Bloomberg News report. The tech giant is stepping away from risky projects and has chosen not to exercise an option to expand its agreement with Nscale at a Texas facility, whi

Microsoft is tightening oversight of some data centre projects from neocloud providers Nebius, IREN and Nscale, Bloomberg News reported on Thursday, citing people familiar with the matter. Shares of neocloud firms fell in afternoon trading, with Nebius and IREN down more than 13 per cent and CoreWeave down 11 per cent.

The Windows maker is stepping away from projects it deems risky and is debating internally whether to sign new neocloud deals, according to the report. Microsoft is focused on expanding its own data centres rather than adding neocloud deals, though it has not fully ruled them out.

Microsoft will not exercise the option to more than double the size of its existing agreement with Nscale to rent more computing power at a Texas data centre. The company also pulled out weeks ago of a deal to anchor Nscale's flagship data centre in Loughton, Essex, after power connection delays pushed supply into the 2030s.

Microsoft, Nebius, IREN and Nscale did not immediately respond to Reuters' requests for comment. Investors and data centre developers face rising uncertainty in Texas after Gina Hinojosa won the governor's race, with the governor-elect having said she would ban new projects until state lawmakers pass rules for the industry.