Microsoft plans to cut the number of its neocloud partners
Microsoft has not selected the partners to stop, and two sources say it did not renew its deal with Oracle.
Microsoft plans to cut the number of its neocloud partners, say persons who know about the plans. Neoclouds are external firms that supply capacity for AI work. Microsoft works with six of them and with Oracle. One source says Microsoft wants its data centers to be first. These firms have problems because debt costs more and their debt is large.
What is new
Microsoft examines its partners at this time. It has not selected the neoclouds that it will stop. Its neocloud partners are:
- CoreWeave and Nebius
- Chronoscale and IREN
- Lambda and Nscale
The proof
The report gives no figures. The sources gave no names. Bloomberg reported the plans first.
What is not known
Microsoft says that its strategy has flexibility and selection. It says it combines its data centers, sites that it rents and partners, and examines them against the use by customers. It did not say which partners it will stop.
Insight: A large buyer can leave a neocloud, but the neocloud cannot leave
In October 2026, Gartner said that more than 80 percent of neocloud providers will stop operation. It forecasts $3.6 trillion of revenue through 2030, but says owners must get $8.5 trillion. This reads as a standoff about who carries the risk: a large buyer can step back, but a firm with debt cannot. Look for the names that Microsoft drops.
Sources
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