It was revealed over the weekend (03-04Sep16) that the 22-year-old singer was the latest member of the boy band to branch out on his own, after putting pen to paper with Universal.
However, Niall's decision is said to have infuriated Simon, who was hoping to convince the young star to sign with his Syco record label to go solo.
"Simon has made no secret of his expectations for Niall to stay loyal to him and has been desperately trying to keep him as a solo act with plans to turn him into a Justin Bieber style artist," a source told Britain's The Sun newspaper.
"They've worked together closely since day one and have always had a strong relationship, but Universal offered a lot of money. Simon's likely to be so frustrated Niall has gone to a rival."
It's the second time Simon has been blindsided by a One Direction member signing with a rival.
Earlier this year (16), Liam Payne opted to go with Capitol UK for his solo deal, and Simon told Entertainment Tonight that he was "surprised" by Liam's move, adding: "I was slightly surprised to read that Liam signed to another label. I wasn't expecting it. But you know, that happens."
One Direction are currently on an indefinite hiatus, and Niall's former bandmates are all hard at work on solo projects. Harry has joined Liam and Niall in signing a solo deal, as well as working on his acting career by filming a role in Christopher Nolan's war epic Dunkirk.
Louis Tomlinson has yet to go solo, but is believed to be planning to focus on his own record label during the band's hiatus.
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