Microsoft has ended its planned agreement with British AI infrastructure company Nscale for a data center in Loughton, Essex, according to reports published on Oct. 18. The withdrawal would remove the project’s expected anchor tenant as the site faces a long delay to its grid connection. Microsoft has not publicly explained the reported decision. [1] [2] [5]

A project designed around a major cloud customer

Nscale announced its Microsoft relationship in 2025 as part of a plan to build a large AI supercomputer in the United Kingdom. The company described a 50-megawatt Loughton facility that could scale to 90 MW, with about 23,000 NVIDIA GB300 GPUs intended to support Microsoft Azure services from the first quarter of 2027. Microsoft separately described its partnership with Nscale as a project to build a UK supercomputer supporting its British services. [3] [4]

The Telegraph first reported that Microsoft had told Nscale it was terminating the agreement. Bloomberg and the BBC also reported Microsoft’s withdrawal, while noting that the company did not provide a public explanation. Nscale has said it remains committed to Loughton and the UK and is exploring alternative power sources. [1] [2] [5]

Grid access is the central constraint

The reports connect the decision to the site’s power timetable. Bloomberg said authorities did not expect to supply electricity to the location until the 2030s. The BBC reported that a connection originally expected by the end of 2026 had been delayed to that decade; the Guardian put the likely window in the early to mid-2030s. [2] [5] [6]

A data center built around large numbers of AI accelerators needs dependable electricity before it can serve cloud workloads. The delay therefore challenges the original plan to bring the Loughton facility online for Azure in early 2027. Nscale’s 2025 announcement made Microsoft the project’s named customer, and the Guardian described Microsoft as its only publicly announced customer. [3] [6]

The data-center project itself has not been confirmed cancelled. Nscale says it remains committed to the site, and the available reports do not establish that it has secured replacement power or a new anchor tenant. The immediate change is the reported loss of Microsoft’s planned role; the project’s eventual timeline now depends on power access and customer demand.

Sources

[1] The Telegraph: Microsoft axes AI deal in setback for UK data-centre pioneer [2] Bloomberg: Microsoft scraps UK data-center deal with Nscale, Telegraph says [3] Nscale: Nscale contracts approximately 200,000 NVIDIA GB300 GPUs with Microsoft [4] Microsoft: Inside the world’s most powerful AI datacenter [5] BBC: Microsoft pulls out of UK’s largest AI data centre [6] The Guardian: Microsoft pulls out of Essex AI datacentre project over power supply concerns