Transition metal dichalcogenides (TMDC) are a rich family of two-dimensional materials displaying a multitude of different quantum ground states. In particular, d$^3$ TMDCs are paradigmatic materials hosting a variety of symmetry broken states, including charge density waves, superconductivity, and magnetism. Among this family, NbSe$_2$ is one of the best-studied superconducting materials down to the monolayer limit. Despite its superconducting nature, a variety of results point towards strong electronic repulsions in NbSe$_2$. Here, we control the strength of the interactions experimentally via quantum confinement effects and use low-temperature scanning tunneling microscopy (STM) and spectroscopy (STS) to demonstrate that NbSe$_2$ is in strong proximity to a correlated insulating state. This reveals the coexistence of competing interactions in NbSe$_2$, creating a transition from a superconducting to an insulating quantum correlated state by confinement-controlled interactions. Our results demonstrate the dramatic role of interactions in NbSe$_2$, establishing NbSe$_2$ as a correlated superconductor with competing interactions.
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