Microsoft Scraps UK Data Center Deal With Nscale Ahead of Its IPO

Microsoft withdrew from a data center deal with Nscale in the UK, days before Nscale's $3B IPO. The project, a key part of Microsoft's UK AI infrastructure commitment, faces delays due to grid connection issues. Nscale's IPO relies heavily on Microsoft and Anthropic, with 85% of its backlog tied to these two customers. Microsoft's exit raises concerns about Nscale's financial stability and the broader AI infrastructure buildout.

Microsoft canceled a UK data center deal with Nscale, a startup preparing for an IPO. Nscale faces delays in power supply and construction, relying on Microsoft and Anthropic for 85% of contracts. The IPO, targeting $3 billion, may be impacted by investor concerns over AI sector risks and recent market volatility in similar companies.

Microsoft canceled a data center deal with UK-based Nscale, threatening Nscale's $35bn IPO plans. Microsoft was to be the anchor tenant, and its withdrawal raises concerns about Nscale's ability to secure financing and proceed with the listing. Nscale is backed by Nvidia and aims to be a leading UK data center provider.

The UK's CMA proposed designating Microsoft with strategic market status for its business software, including Microsoft 365, Windows, and Copilot, citing concerns over bundling and competition. The move could impact licensing, pricing, and bundling practices, with a final decision expected by February 2027. Microsoft defends its products as open and interoperable.

Microsoft and Health-ISAC seized domains linked to three Chinese-language cybercrime services, YAM Store, CoGUI, and Iron Man, which sent over 1 billion phishing messages. The services targeted 75,000 organizations, including Microsoft customers, in 150+ countries, generating millions for operators. The investigation involved multiple global partners and led to the disabling of 20,000 accounts and blocking 100,000 fraudulent domains.

NiSource and Microsoft agreed to a 20-year power deal for Microsoft's data center in La Porte, Indiana. Starting in 2028, the agreement will add 1,100 megawatts of power and 600 megawatts of battery storage. Microsoft will fund new power generation and transmission equipment. NiSource estimates $1.75 billion in savings for existing customers over the contract's lifetime.