Reports indicate Microsoft has abandoned plans to expand its computing capacity lease with Nscale, which faces new challenges just before its IPO.

Microsoft has dropped its option to expand computing capacity at its Texas data center, forcing Nscale to seek new clients for the new facility or risk losing billions in revenue. Compounding the issue, Microsoft previously exited a $3 billion deal in Essex, UK, and its flagship project in West Virginia faces construction delays. This British AI company, backed by NVIDIA, is preparing for an IPO as investor concerns over high-debt infrastructure mount.