Microsoft withdraws from Nscale's £2 billion UK AI data centre deal

Microsoft has terminated its agreement with British cloud provider Nscale to fund a £2 billion AI data centre and supercomputer in Loughton, Essex. The withdrawal follows warnings from power grid officials that electricity supply for the site would not be available until the 2030s. Despite losing Microsoft's backing for the Loughton project, which is projected to create 250 jobs, Nscale remains committed to the site and is exploring alternative UK power sources. Nscale and Microsoft continue to collaborate on international projects in Norway, Portugal, and the United States.

The Loughton AI data centre project

• ▪Microsoft terminated its agreement with British cloud provider Nscale to fund a supercomputer and AI data centre in Loughton, Essex
• ▪Following Microsoft's withdrawal, Nscale stated that it remains committed to the £2 billion Loughton project, actively exploring alternative power sources for the Loughton site while seeking additional expansion sites across the United Kingdom

Power grid connection delays

• ▪National power grid officials informed Nscale that power supply for the Loughton AI data centre was not expected until the 2030s, despite initial expectations of power delivery by late 2026
• ▪An Nscale spokesperson characterized the power connection delays for Nscale's AI data centre project in Loughton, Essex as part of a broader London-wide grid issue

Nscale's growth and IPO filing

• ▪Nvidia-backed AI cloud provider Nscale scaled its total contracted value from $100 million to over $103 billion within two and a half years of launching
• ▪Nscale filed for an initial public offering in the United States last month, listing Microsoft and Anthropic as expected major customers in its prospectus