Microsoft exits Nscale AI data centre project in Essex
Microsoft has pulled out of a deal to be the anchor tenant for Nscale's Loughton data centre, which was planned as the UK's largest sovereign AI facility. The decision follows news that the local electricity grid cannot provide sufficient power to the site until the 2030s.
What happened
- 2025
The UK government highlights the Loughton project as part of its AI strategy [1].
- March 2026
Reports emerge that the planned site is still an active scaffolding yard [1].
- September 2026
UK Power Networks informs Nscale that adequate power will not be available until the early to mid-2030s [1].
- October 2026
Microsoft terminates its involvement in the project [2].
What you need to know
Nscale still intends to move forward with the Loughton project and is seeking other power options [2].
Microsoft and Nscale continue to collaborate on separate projects in the US, Portugal, and Norway [2].
The facility was expected to create 250 permanent jobs upon completion [2].
Nscale is backed by Nvidia and has board members including Nick Clegg and Sheryl Sandberg [1].
It is unclear if Nscale will be able to find a new anchor tenant or if the power delays will force a change in location.
Background
Nscale is a 'neocloud' provider, meaning it is a company with close ties to Nvidia that builds infrastructure for the AI industry [1]. The company had pledged £2bn for the Essex facility, which was intended to house a supercomputer funded by Microsoft [2].
The project was a key part of the UK's sovereign AI push under Prime Minister Keir Starmer [1]. Nscale has ambitions to launch an IPO on Wall Street this year with a potential valuation of $35bn [1].
Questions people ask
Why did Microsoft leave the project?
The company pulled out due to concerns over power supplies after it was revealed the site would face a lengthy wait for electricity [1].
Is the entire Nscale-Microsoft partnership over?
No, both companies state their relationship remains strong and they are still working together on projects in other countries [2].
Where this came from
Found through Google Trends and drafted with AI from at least two cited sources. Published automatically after passing our automated checks for sources, wording and safety. It may not have been reviewed by a person yet. Report a correction.