Microsoft cancels $500MW AI data center expansion in Texas
Microsoft did not exercise an option to expand its Texas data center with UK-based Nscale, a move worth tens of billions. The decision comes ahead of Nscale’s planned IPO at a $35 billion valuation and follows Microsoft’s earlier withdrawal from a $3 billion lease at Nscale’s UK facility. Nscale reported a net loss of $1 billion in H1 2026 on $141 million in revenue, with a $103 billion backlog…
Key points
- Microsoft canceled a $500MW expansion option with Nscale in Texas, worth tens of billions
- Nscale’s IPO at $35B valuation looms as it faces $1B H1 2026 loss on $141M revenue
- Semiconductor stocks fell 15% as AI investment caution spreads, Toyota rose 16%
The news contributed to a 15% plunge in Japanese semiconductor stocks, as markets reassessed AI investment momentum. Analysts linked the sell-off to broader concerns over AI capital expenditure, citing regulatory shifts in US states like Texas and a perceived slowdown in AI infrastructure spending. Toyota’s 16% gain contrasted with the downturn, driven by revised earnings forecasts and easing trade tariff expectations.
The story so far
4 episodes →- Microsoft cancels $500MW AI data center expansion in Texasthis story
Nikkei Average down 1,110 yen, yet TOPIX rises. Semiconductor stocks plunge around 15%, Toyota up 16%. Reading Microsoft's 'AI investment pass' and the 5% US interest rate
note.com · 4 November 2026
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