W.019Microsoft passed on Nscale’s Texas option. Only 2.5% of the value of Nscale’s $103B of contracts is active
Microsoft declined an option that would have more than doubled its Texas contract with Nscale, the Financial Times reported. Nscale’s IPO filing puts its active and contracted total contract value at $103.4B, of which $2.6B is active. Microsoft’s statements of work are worth up to about $43.8B and Anthropic’s agreements up to approximately $44.6B. In the first half of 2026 Nscale had $140.6M of revenue and a $1.02B net loss.
What Microsoft declined
Microsoft did not take up an option to expand its Texas contract with Nscale. The Financial Times reported, citing three people, that the option would have more than doubled Microsoft’s existing contract at the site in Ward County, Texas, and was worth tens of billions of dollars. Nscale told the newspaper the option was closer to 500 megawatts, at its own site. A source told Reuters the decision was made several months ago, before Nscale filed for its IPO in September, and that it changes neither the existing Texas contract nor the about $103B of contract value in the filing. Microsoft and Nscale did not respond to Reuters’ request for comment, and the FT’s report carries no comment from Microsoft. When the Texas deal was announced in October 2025, DCD reported that Microsoft held an option on a second phase of 700MW starting in late 2027.
Nscale leases 234 MW at the site, and must take 89 MW more when it becomes available. The landlord, Ionic Digital, says in its own registration statement that Nscale leases 234 MW for 126 months at a fixed rent of $182.5M a year after an 18-month ramp-up, and that a February 2026 amendment obliges Nscale to take a further 89 MW when it is available, expected in the second half of 2027. The same filing says Nscale gave Microsoft an option on additional power at the property, if it becomes available, from the second half of 2027. On Nscale’s figure, the declined option was about 2.1 times the capacity leased today.
Texas: what is leased, and what was optional
Nscale’s Texas site, MW. First bar: capacity leased to Nscale by Ionic Digital (solid) and the further 89 MW Nscale must take when available (outlined), from Ionic’s S-1. Second: the option Microsoft declined, as Nscale described it to the FT (closer to 500 megawatts). Third: the option on a second phase that DCD reported when the deal was announced in October 2025. The bars measure different things at different dates and are not additive.
What the filing says Nscale has
Most of the $103.4B is contracted but not yet active. Nscale’s S-1 reports $103.4B of active and contracted total contract value at August 31, 2026, up from $38.0B at the end of 2025, with a weighted average contract life of about 5.7 years. Of that, $2.6B was active. TCV is Nscale’s measure; it is not recognized revenue. The filing counts about 1.37 GW of capacity active and contracted, and about 25,000 active GPUs out of about 461,000 active and contracted, or 5.4%.
At their maximums, two customers’ contracts equal 85% of it. Anthropic’s GPU services agreements, dated August 25, 2026, are worth up to approximately $44.6B, at Nscale’s Monarch campus in West Virginia. Microsoft’s statements of work, signed between September 2025 and April 2026, are worth up to about $43.8B through December 2033, excluding optional extensions, Reuters reported from the filing. That leaves about $15.0B for every other customer.
$2.6B of $103.4B is active
Nscale’s active and contracted total contract value (TCV), $B, from its S-1: at August 31, 2026, split into active and not yet active (by difference), and at December 31, 2025; then the August total by customer. Microsoft and Anthropic are “up to approximately” amounts; “everyone else” is the remainder by difference. Percentages are shares of $103.4B.
The losses behind the listing
Nscale lost $7.26 for every dollar of revenue in the first half. The S-1 shows revenue of $140.6M in the six months to June 2026, 13.5 times the $10.4M a year earlier, and a net loss of $1,020.1M. For all of 2025, revenue was $33.0M and the net loss $761.8M. Nvidia and other investors subscribed on September 15 for at least $3.1B of convertible notes and other securities; the notes convert when the IPO completes, the filing says. The S-1 sets no price range. Microsoft had already pulled out of a deal to anchor Nscale’s site in Loughton, Essex, as reported in October; the FT put that deal at $3.0B. Nscale had been told not to expect power there until the 2030s.
Revenue grew 13.5×. The loss grew 2.8×
Nscale revenue (first bar) and net loss (second bar), $M, for the first half of 2025, the full year 2025 and the first half of 2026, from the S-1. Losses are drawn as positive bars.
What this changes on 06.ai
- Pack lead (Who funds the neoclouds?): Nscale’s filing gives a contracted-to-active ratio ($103.4B against $2.6B) and customer concentration (up to 85% in two names) that can sit beside CoreWeave’s backlog.
- Pack lead (Anthropic compute): up to $44.6B of Nscale capacity at Monarch, West Virginia, from agreements of August 25, 2026, is a named Anthropic commitment to check against the S-1 total the pack uses.
- Series lead: hyperscaler options declined or deals left at neoclouds (Loughton, Texas), with their reported values and sizes.
Sources and method
| Item | Figure | Source |
|---|---|---|
| S-1 | Active and contracted TCV $103.4B at Aug 31, 2026, of which $2.6B active; $38.0B at Dec 31, 2025; weighted average contract life about 5.7 years; Anthropic GPU services agreements dated Aug 25, 2026, up to approximately $44.6B, at the Monarch campus, West Virginia; revenue $140.6M and net loss $1,020.1M in H1 2026 ($10.4M and $368.9M in H1 2025); revenue $33.0M and net loss $761.8M in 2025; about 1.37 GW active and contracted; about 25,000 active and about 461,000 active and contracted GPUs; Nvidia and other subscriptions of at least $3.1B on Sep 15, 2026; NYSE, ticker NSCL; no price range | Nscale S-1, Sep 18 |
| Microsoft | Declined an option to expand its Texas contract, a decision made “several months ago”, before the IPO filing, a source said; the existing contract and the about $103B are unaffected; Microsoft’s statements of work, up to about $43.8B through 2033, from the filing; no on-record comment | Reuters, via Euronext, Nov 5 |
| Option | The option would have more than doubled the existing Texas contract, worth tens of billions of dollars, three people said; Nscale said it was closer to 500 megawatts, at its own site; Microsoft earlier pulled out of a $3B deal at Nscale’s Essex site | FT, via Investing.com and Yahoo Finance, Nov 5 |
| Texas lease | 234 MW leased to Nscale for 126 months, triple-net; a further 89 MW Nscale must take when available, expected 2H 2027; fixed rent $182.5M a year after an 18-month ramp-up, $250.5M with the 89 MW; Nscale has given Microsoft an option on additional power at the property, if available, from 2H 2027 | Ionic Digital S-1, Jun 2026 |
| Phase 2 | Microsoft deal in Texas announced, with Microsoft holding an option on a second phase of 700MW starting in late 2027 | DCD, Oct 2025 |
| Loughton | Microsoft pulled out of anchoring Nscale’s Loughton, Essex project, first reported by the Telegraph; Nscale had been told not to expect power until the 2030s | The Next Web, Oct 18 |
Shares of TCV: active $2.6B ÷ $103.4B = 2.5%; not yet active $103.4B − $2.6B = $100.8B. Microsoft $43.8B ÷ $103.4B = 42.4%; Anthropic $44.6B ÷ $103.4B = 43.1%; together 85.5%; everyone else $103.4B − $43.8B − $44.6B = $15.0B (14.5%). Both customer figures are “up to” amounts, so the remainder is a difference, not a reported figure. Growth $103.4B ÷ $38.0B = 2.72×. GPUs 25,000 ÷ 461,000 = 5.4%.
Texas: 234 MW + 89 MW = 323 MW; rent $182.5M ÷ 234 MW = $0.78M per MW a year. Option ratio 500 ÷ 234 = 2.14, on Nscale’s approximate figure. Losses: $1,020.1M ÷ $140.6M = 7.26; revenue growth $140.6M ÷ $10.4M = 13.5×; loss growth $1,020.1M ÷ $368.9M = 2.77×.
Wire reports are written within hours of the news, on a six-hour schedule. Each lists its sources and shows the arithmetic behind its figures. Not investment advice.