Microsoft Cuts Neocloud Partners as $45.2 Billion Capex Push Favors In-House Data Centers
Updated
Updated · CNBC · Nov 6
Microsoft Cuts Neocloud Partners as $45.2 Billion Capex Push Favors In-House Data Centers
2 articles · Updated · CNBC · Nov 6
Summary
Microsoft is reviewing its neocloud roster and may drop some suppliers, with two sources saying it already chose not to renew a deal with Oracle.
The pullback reflects a shift toward Microsoft-owned data centers as AI infrastructure faces higher borrowing costs, heavy debt loads and doubts about how long the buildout can keep accelerating.
Nscale has already lost Microsoft work in the U.K. and Texas, while IREN said a Microsoft-requested networking upgrade pushed capacity handover to January or February from this year.
The strain is hitting public neoclouds: CoreWeave, Nebius and IREN shares are down roughly half over the past month, even as Microsoft said some GPU cloud contracts slipped into the first half of 2027.
Microsoft still spent $45.2 billion on capex and finance leases last quarter and expects spending to accelerate, underscoring that demand remains large even as partner selection tightens.