Microsoft pulls out of Nscale's Essex AI data centre as grid power slips to the 2030s
The Loughton site was meant to host what Microsoft called the UK's largest supercomputer. Nscale says it is still committed and is looking at other power sources, weeks before a planned stock-market listing.
At a glance
- Microsoft has withdrawn as the anchor tenant of Nscale's planned AI data centre in Loughton, Essex.
- The site has been told it will not get a national grid connection until the 2030s; it was originally due to open in late 2026.
- The project was announced in January 2025 as a roughly $3 billion, 50MW facility, and Microsoft planned the UK's largest supercomputer there.
- Nscale says it remains committed to Loughton and the UK, is exploring alternative power, and that its relationship with Microsoft 'remains strong'.
Microsoft has pulled out of a flagship artificial intelligence data centre in Loughton, Essex, after the site was told it would not be connected to the national power grid until the 2030s. The project's developer, British AI cloud company Nscale, says it is still committed to building it.
The project at a glance
| Location | Loughton, Essex, north-east of London |
| Developer and operator | Nscale |
| Anchor tenant | Microsoft (now withdrawn) |
| Announced | January 2025 |
| Investment | About $3 billion |
| Capacity | 50MW of AI and high-performance computing, with up to 90MW of power |
| Original opening | Late 2026 |
| Grid connection now expected | 2030s |
Microsoft had planned to build what it called "the UK's largest supercomputer" at the site as part of a $15 billion investment in British AI infrastructure.
Why it fell through
AI data centres need enormous and reliable supplies of electricity. Nscale was told that a grid connection for Loughton would not come until the 2030s — far too late for Microsoft's plans. Microsoft has not commented publicly.
Nscale's response
Nscale said: "We remain committed to both the Loughton project and the UK," adding that it is exploring alternative power sources for the site and other UK locations. It described the grid problem as a London-wide issue that does not affect its other contracts, and said: "Our relationship with Microsoft remains strong and long-term."
Bad timing for a listing
The setback comes as Nscale prepares a stock-market listing aiming to raise up to $3 billion. Its filing shows about $103 billion of contracted revenue, around 40% of it from Microsoft, and a heavy reliance on a few large AI customers. Loughton is a small part of that total, but the news adds to investor nerves about fast-growing "neocloud" companies that borrow heavily to build data centres. Nscale's flagship site in Norway is also running about six months behind schedule.
Earlier this year OpenAI dropped out of a separate UK project with Nscale, citing energy costs and infrastructure.
Why it matters
The UK government wants Britain to be a leading AI power and has promoted new data centres as a source of investment and jobs. But grid connections have become the biggest bottleneck: projects across the country are queuing for years to be plugged in. If big tech companies cannot get power in time, they may build in countries with faster connections instead.
For the wider world, the story shows that the AI boom is increasingly limited not by chips but by electricity — a challenge every country, including Pakistan and India, faces as it tries to attract data-centre investment.
What happens next
Nscale will try to find alternative power for Loughton, such as on-site generation, and a new tenant. Its listing, expected soon, will show how investors weigh the setback.
Questions people are asking
Why did Microsoft pull out of the Nscale Loughton data centre?
The site cannot get a national grid power connection until the 2030s, years later than its planned late-2026 opening. Microsoft has not commented publicly on its reasons.
What is Nscale?
A British AI cloud company that builds and runs data centres filled with high-end chips for AI customers. It is preparing a stock-market listing and counts Microsoft as one of its largest customers.
Why are UK data centres delayed?
AI data centres need huge amounts of electricity, and parts of the UK grid, especially around London, have long waiting lists for new connections. Some projects are being told to wait until the 2030s.
