Project News / Data Center
Microsoft Passes on Expansion of Nscale's Ward County AI Campus; Base Lease Remains
The existing roughly 240MW phase at Ionic Digital's Cedarvale site near Barstow is unaffected.
Microsoft has declined an option to expand its capacity at Nscale's AI data-center campus in Ward County. The decision was made several months before Nscale filed for an initial public offering in September.
The campus is at Ionic Digital's Cedarvale site near Barstow, a former bitcoin-mining location being converted for AI computing. Its base phase of about 234 to 240 megawatts is leased in full to Nscale under a 10-year triple-net lease. Ionic's lease was valued at about $2 billion when it was announced in October 2025.
Microsoft's existing contract for the Texas site is unchanged. GPUs for the base phase were scheduled to be deployed over 12 to 18 months under the original terms.
The size of the declined expansion varies by account. The original announcement described a 700-megawatt add-on; a Nscale spokesperson has since put it closer to 500 megawatts. The option has been valued at tens of billions of dollars.
Nscale said it is in discussions with several other potential customers for the remaining capacity. Microsoft accounts for about 42% of Nscale's total contract backlog of about $103 billion.
The Cedarvale campus had been pitched as able to grow to 1.2 gigawatts, with expansion beginning in late 2027. Ionic has said it holds provisional ERCOT classification for 466 megawatts, with 377 megawatts expected to be energized in late 2027.
Microsoft also stepped back from a Nscale project in Loughton, England, weeks earlier. No contractor for the Texas conversion has been publicly identified.
