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

Microsoft has withdrawn from an agreement to use a planned artificial intelligence data centre being built by British company Nscale in Loughton, Essex, The Guardian and BBC News reported on Sunday (UK time). The Telegraph first reported the move.

Microsoft was expected to be the anchor tenant at the site, which the UK government described as the country’s “largest UK sovereign AI datacentre” when it announced its AI strategy in 2025, The Guardian said. Microsoft declined to comment, according to the BBC.

The data centre had been due to receive its power supply at the end of this year. Earlier this month, UK Power Networks, which runs the electricity network in London and south-east England, told Nscale it could not supply enough power until the early to mid-2030s, The Guardian reported.

“We remain committed to both the Loughton project and the UK, and we are exploring alternative power sources for the site, in addition to other expansion sites in the UK,” an Nscale spokesperson said. “Our relationship with Microsoft remains strong and long-term, and this unfortunate London-wide grid issue has no impact on our other contracts.”

The BBC said the two companies are still working together on projects in Norway, Portugal and the United States. Nscale, which is backed by Nvidia, has been preparing a planned stock market listing in New York, and The Guardian reported a potential valuation of $US35 billion. The BBC said the Loughton site is expected to create 250 permanent jobs when it opens.