Microsoft has withdrawn from an agreement to anchor Nscale’s planned data centre in Loughton, Essex, after severe electricity connection delays left the facility facing a decade-long wait for power, reported Telegraph.
The US technology firm had agreed last year to lease 23,000 Nvidia AI processors at the site, which was intended to be Nscale’s first operational British data centre.
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Scheduled to open next year, the project stalled after electricity network operators informed Nscale that a power connection would not be available until the 2030s. The cancellation leaves the site without an announced customer. Microsoft did not comment.
An Nscale spokesman said: “We remain committed to both the Loughton project and the UK and we are exploring alternative power sources for the site, in addition to other expansion sites in the UK.
“Our relationship with Microsoft remains strong and long-term, and this unfortunate London-wide grid issue has no impact on our other contracts.”
The loss of the anchor tenant complicates Nscale’s preparations for a Wall Street flotation that could value the firm at up to $35bn (£26bn), compared with a private valuation of $15bn.
Microsoft generates over 40pc of Nscale’s $103bn in contracted revenue, although the Essex contract represented a small portion of that sum. Anthropic is also a major customer.
Grid infrastructure shortages and high electricity prices continue to disrupt data centre expansion across the UK.
In April, OpenAI discontinued plans for a “Stargate” facility in partnership with Nscale on Tyneside due to domestic energy costs. Nscale has also encountered construction delays and reported financial penalties at its data centre in Norway.
The setback occurs alongside wider market difficulties for data centre operators facing elevated debt costs and rising interest rates.
Established two years ago by former coal miner Josh Payne, Nscale is backed by Nvidia and has former executives Sheryl Sandberg and Sir Nick Clegg from Facebook, on its board.
In August this year, Microsoft made its India South Central cloud region in Hyderabad, Telangana, generally available, allowing customers to run eligible Microsoft Cloud services and workloads from the site.
