Microsoft pulls out of Nscale's Loughton data centre deal in blow to UK AI ambitions
Microsoft has pulled out of its data centre agreement with British AI cloud provider Nscale for the Loughton, Essex site — billed as the UK's largest "sovereign" AI data centre — after grid officials said the site would not get power until the 2030s.
Microsoft has pulled out of a data centre deal with British AI cloud provider Nscale for a site in Loughton, Essex, Britain’s Telegraph newspaper reported on Sunday, in a setback to the UK’s artificial intelligence ambitions, Reuters reported.
Microsoft was to be the anchor tenant at the site — Nscale’s first in Britain, billed as the largest “UK sovereign” AI data centre — housing more than 23,000 Nvidia AI chips to power Microsoft’s Azure services in the UK, according to The Times. The deal was announced in September last year during President Trump’s state visit.
The project was beset by delays: UK Power Networks told Nscale the centre would not gain access to enough grid power until the early 2030s, the Times reported. Microsoft declined a Reuters request for comment.
“We remain committed to both the Loughton project and the UK and we are exploring alternative power sources for the site,” an Nscale spokesman told Reuters, adding that “our relationship with Microsoft remains strong and long-term” and the withdrawal has no impact on its other contracts.
Nscale filed for a US initial public offering last month, with Microsoft and Anthropic expected to be its major customers. The company says it has more than $103 billion in total contracted value, with Microsoft alone signing deals worth about $43.8 billion since late 2025, per its IPO filing.
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