Microsoft pulls out of Nscale's Essex AI data centre over grid delays

Microsoft has pulled out of a deal to anchor Nscale's flagship UK data centre in Loughton, Essex, after power connection delays pushed the site's expected electricity supply into the 2030s, Reuters reported on October 19.

Microsoft said the decision covers one site.
"This decision relates to a single site," a Microsoft spokesperson told Reuters. The company said it remains committed to its partnership with Nscale, including work to build digital infrastructure and support AI growth globally. Electricity grid officials had told Nscale they did not expect to supply power to the site until the 2030s.

Nscale says the Loughton project goes on.
"Our relationship with Microsoft remains strong and long-term, and this unfortunate London-wide grid issue has no impact on our other contracts," a Nscale spokesperson said. "We remain committed to both the Loughton project and the UK, and we are exploring alternative power sources for the site, as well as other expansion sites in the UK." Nscale has said it pledged £2bn to build the facility.

The site was planned for 23,040 Nvidia GB300 GPUs.
The companies said last year the Loughton site would provide 50 megawatts of AI computing capacity to help power Microsoft's Azure services in Britain. The project was among technology deals announced during US President Donald Trump's visit to the UK in September 2025. Nscale and Microsoft are still working together on projects in Norway, Portugal and the United States, according to the BBC.

Grid queues are a major constraint on UK data centres.

Bottlenecks in grid connection queues have delayed data centre projects by as long as 13 years, Reuters reported. The Telegraph first reported Microsoft's move.