The rush to build AI data centers is showing cracks. According to Bloomberg, citing people familiar with the matter, Microsoft has tightened oversight of several projects from so-called neoclouds, smaller companies that rent out AI computing power, and is rethinking whether to sign more deals with them.
What Bloomberg reported
- Microsoft is watching projects from Nebius, IREN and Nscale more closely and stepping away from the ones it considers risky.
- It’s debating internally whether to sign new neocloud deals and focusing on expanding its own data centers, though it hasn’t fully ruled them out.
- It won’t exercise the option to more than double its agreement with Nscale at a Texas data center.
- Weeks ago, it already pulled out of Nscale’s site in Loughton, Essex (UK), after power connection delays pushed supply into the 2030s.
How the market reacted
After the report, Nebius and IREN fell more than 16% in afternoon trading and CoreWeave dropped 12.29%, according to Reuters. Microsoft is a key customer for these companies: Nebius signed a $17.4 billion deal with it and IREN a $9.7 billion one.
My take
A caveat: all of this comes from anonymous sources, and I couldn’t read Bloomberg’s original article because it’s paywalled; I’m going by Reuters’ summary. Still, Loughton sums up the problem: you can have the money and the chips, but without grid power there’s no data center. For anyone who uses AI services, infrastructure delays eventually show up as usage limits and prices, even as demand keeps growing with launches like Personal Finance in Claude.
Is the AI data center boom starting to cool? Let me know in the comments or on social media.
Sources: Reuters via PrimeXBT (Bloomberg News report), The Next Web (Loughton exit), American Bazaar (Nebius deal), CryptoRank (IREN deal). As of November 8, 2026.
