Microsoft has decided not to expand its Texas data center lease agreement with British AI infrastructure company Nscale, according to sources, forgoing an option that could have more than doubled the existing contract—potentially worth hundreds of billions of dollars. The move deals a fresh blow to Nscale, which is preparing for an IPO at a valuation of approximately $35 billion. The company must now find other customers for the data centers in question or risk losing tens of billions of dollars in future revenue.