Microsoft pulls out of Nscale's planned AI data centre in Essex amid power supply delays

Microsoft has ended its agreement for the AI data centre that British company Nscale is planning at Loughton in Essex, as reported by The Guardian on 18 October, after the story was first reported by the Telegraph. The Guardian says the project, which the UK government highlighted as the "largest UK sovereign AI datacentre" when announcing its AI strategy in 2025, was planned to open next year, that Microsoft had been expected to be the anchor tenant, and that it was Nscale's only publicly announced customer for the site; Microsoft is understood to remain on board for an Nscale project in Norway. According to Reuters, the Telegraph reported that national grid officials had told Nscale they did not expect a power supply for the data centre until the 2030s, but did not say why Microsoft withdrew; Microsoft did not immediately respond to Reuters. Nscale said it remained committed to the Loughton project and the UK and was exploring alternative power sources for the site, adding: "Our relationship with Microsoft remains strong and long-term, and this unfortunate London-wide grid issue has no impact on our other contracts." Nscale filed for a US initial public offering last month, Reuters reported.

What it means for business: grid connection dates are becoming a practical limit on new AI computing capacity in the UK, so organisations planning around specific data-centre projects may want to check how firm their power and opening dates are.