Microsoft pulls out of Nscale's planned data centre in Loughton, Essex

Microsoft has pulled out of its deal to be the anchor tenant at Nscale's planned data centre in Loughton, Essex, The Telegraph reported on Sunday 18 October. Microsoft had agreed to rent 23,000 Nvidia AI chips at the site and was its only announced customer, the paper said. The deal was announced last year as part of £22bn of UK investment Microsoft pledged during Donald Trump's state visit.

The site was meant to open in 2027. UK Power Networks, which is to connect it to the local grid, had told Nscale the grid could not supply enough power until the early to mid-2030s, the Guardian reported on 24 September, citing the AI newsletter Morning Intelligence. Nscale said in September 2025 that the site would have 50MW of capacity, scalable to 90MW.

The Telegraph said grid bosses had told Nscale they did not expect to supply power until the 2030s. The paper did not say why Microsoft withdrew, Reuters and Bloomberg noted on 18 October. Microsoft did not comment to The Telegraph and did not immediately respond to Reuters or Bloomberg.

An Nscale spokesman told The Telegraph the company remained committed to Loughton and was "exploring alternative power sources for the site", as well as looking at other UK sites. He said its relationship with Microsoft "remains strong and long-term" and that "this unfortunate London-wide grid issue has no impact on our other contracts". Microsoft accounts for more than 40% of Nscale's $103bn of contracted revenue, though the UK deal is believed to be a small part of that, the paper reported. Nscale filed last month for a US stock market listing, Reuters said.

UK Power Networks told the Guardian in September that it could not discuss individual projects, but that many data centres due to join its local network were waiting for upgrades to the national transmission system first.

Around 315 data centre projects, with about 73GW of contracted demand between them, were in Great Britain's queue for electricity connections, Ofgem said in a consultation published on 29 July. Peak demand across Great Britain in 2025 was 45GW, the regulator said.

In April OpenAI paused Stargate UK, a separate project with Nscale that included a site at Cobalt Park in North Tyneside. It said it would go ahead only when conditions "such as regulation and the cost of energy" allowed, Politico reported on 8 April.

Sources: The Telegraph, 18 October 2026; Reuters, 18 October 2026; Bloomberg, 18 October 2026; Nscale statement, 18 October 2026; The Guardian, 24 September 2026 (including UK Power Networks statement), citing Morning Intelligence; Nscale press release, 16 September 2025; Ofgem, Curate – Demand Connections Reform consultation, 29 July 2026; Politico Europe, 8 April 2026.