Microsoft Pulls Out of Nscale’s Flagship UK AI Data Center, Telegraph Reports
Microsoft has reportedly ended its deal to anchor Nscale’s Loughton, Essex data center, where grid power isn’t expected until the 2030s, a setback for the British AI cloud company weeks ahead of its planned IPO.
By 1EyeAI Desk ·
Microsoft has pulled out of its agreement to be the anchor tenant at Nscale’s first British data center, in Loughton, Essex, The Telegraph reported on Oct. 18. Reuters and Bloomberg relayed the report. Microsoft did not comment to the Telegraph. The figures below are as reported, not confirmed by either company.
According to the Telegraph, Microsoft was the site’s only announced customer and had agreed to rent 23,000 Nvidia AI chips there. The deal was part of £22 billion in UK investment Microsoft pledged during President Trump’s state visit last year, and ministers had promoted the project as a symbol of Britain’s AI ambitions. The site was meant to come online next year, but grid operators have told Nscale not to expect a power supply until the 2030s.
The timing is hard for Nscale, which is preparing a Wall Street listing the Telegraph says could value it at up to $35 billion, against a reported private valuation of $15 billion. The paper reports that more than 40% of Nscale’s $103 billion in contracted revenue comes from Microsoft, though the UK deal is believed to be a small part of that; Anthropic is another major customer. An Nscale spokesman said the company remains “committed to both the Loughton project and the UK,” is exploring alternative power sources for the site, and that the grid issue “has no impact on our other contracts.”
It fits a wider pattern: the Telegraph notes that OpenAI suspended a planned Stargate site with Nscale on Tyneside in April, citing high UK electricity prices, and that AI cloud companies have seen shares and bonds slide as rates rise.
What this means for you: Nothing changes for everyday AI users. If you follow AI infrastructure, the lesson is that power, not just chips, decides where AI capacity gets built, and Nscale’s IPO will be a public test of how much investors still want to fund debt-heavy data center builders.