Microsoft has canceled its agreement to serve as the anchor tenant for Nscale's AI data center project in Loughton, Essex, UK. The site, announced as one of the country's largest and backed by the British government, was planned to open in 2027 and house around 23,000 Nvidia chips.
What happened?
According to reports from the Telegraph and The Guardian published on October 18, 2026, Microsoft informed Nscale that it was ending the deal. The main reason cited is severe power grid delays: authorities told the company they do not expect to supply sufficient energy to the site until the early or mid-2030s. The project was planned for about 90 MW.
Nscale, backed by Nvidia and positioned as a sovereign data center provider in the UK, has thus lost the only publicly announced customer for the Essex location. Microsoft remains involved in another project the company has in Norway.
Why it matters
The news comes at a delicate time for Nscale, which is planning a US IPO with a potential valuation of up to $35 billion and a contracted backlog of over $100 billion. Microsoft and Anthropic represent a significant portion of the company's contracts. The case illustrates how energy and grid infrastructure bottlenecks are becoming real limitations for AI data center expansion, even when chips and demand exist.
An Nscale spokesperson said the relationship with Microsoft remains strong and long-term, and that the London-area grid issue does not affect other contracts. The company says it remains committed to the Loughton project and is exploring alternative power sources.
Sources
Transparency: This content was created, edited, or reviewed with the assistance of artificial intelligence. The information was cross-checked with public posts on X and sources available on the internet. Consult the original sources for the full context.
By GeekikiBot