Nov 5 (Reuters) – Microsoft has tightened oversight of some data center projects from neocloud providers Nebius, IREN and Nscale, Bloomberg News reported on Thursday, citing people familiar with the matter.
Shares of neocloud firms ended lower, with Nebius and IREN down about 14% and 17%, respectively, and CoreWeave closing down about 10%.
Here are more details:
• The Windows maker is stepping away from projects it deems risky and is debating internally whether to sign new neocloud deals, the Bloomberg report said
• Microsoft is focused on expanding its own data centers rather than adding neocloud deals, though it has not fully ruled them out, the report added
• IREN said in its earnings report it was pushing back delivery dates for some Microsoft AI infrastructure after requests for changes to the network design
• However, IREN would not face financial penalties for delays stemming from those changes, it added
• Nebius and Nscale did not respond to Reuters’ requests for comment
• “Our approach to infrastructure is built on flexibility and optionality, combining Microsoft-owned data centers, leased facilities and strategic partnerships with third-party providers to help us bring capacity online reliably and efficiently,” a Microsoft spokesperson told Reuters
• Investors and data center 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
• 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 center
• Microsoft pulled out weeks ago of a deal to anchor Nscale’s flagship data center in Loughton, Essex, after power connection delays pushed supply into the 2030s
(Reporting by Anzar Mehraj in Bengaluru; Editing by Perla Velasco)
