Microsoft plans to use fewer neoclouds as AI buildout shows signs of strain

Microsoft is evaluating which neocloud partners to stop using as it prioritizes its own data centers, according to people familiar with the matter, and it opted not to renew a deal with Oracle. The company has worked with CoreWeave, Nebius, Chronoscale, IREN, Lambda and Nscale, and has already scaled back work with Nscale, including a site in England and a Texas contract. Neocloud shares have fallen sharply amid rising borrowing costs and debt concerns, and Microsoft reported $45.2 billion in capital expenditures and finance leases in its latest quarter.