Microsoft is tightening oversight of some data center projects from neocloud providers Nebius, IREN and Nscale, Bloomberg News reported. Neocloud shares fell in afternoon trading. Microsoft says its infrastructure approach combines owned, leased and third-party capacity.
Microsoft tightens oversight of some data center projects from neocloud providers Nebius, IREN and Nscale, Bloomberg News reported on Thursday, citing people familiar with the matter.
Neocloud shares drop in afternoon trading
Nebius and IREN fell more than 16% in afternoon trading, while CoreWeave dropped 12.29%. Nebius, IREN and Nscale did not immediately respond to Reuters' requests for comment.
Microsoft steps back from risky projects
According to the Bloomberg report, the Windows maker is stepping away from projects it deems risky and is debating internally whether to sign new neocloud deals. 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.
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. Weeks ago, it also pulled out of a deal to anchor Nscale's flagship data center in Loughton, Essex, after power connection delays pushed supply into the 2030s.
A Microsoft spokesperson told Reuters that the company's approach to infrastructure is "built on flexibility and optionality", combining Microsoft-owned data centers, leased facilities and strategic partnerships with third-party providers.
Texas adds uncertainty
Investors and data center developers also face rising uncertainty in Texas after Gina Hinojosa won the governor's race. The governor-elect has said she would ban new projects until state lawmakers pass rules for the industry.
Source: Investing.com (Reuters)
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