Microsoft's exit from the Loughton project

Microsoft has pulled out of the AI datacentre that Nscale was building in Loughton, Essex, because of concerns about power supplies. The British company had announced the site in 2025 as the UK's largest AI datacentre, with an opening planned for next year, and Microsoft was expected to be its anchor tenant and one of the largest planned customers.

The end of the deal, first reported in the Telegraph, leaves Nscale without its only publicly announced customer for the Essex datacentre.

A grid connection delayed to the 2030s

The withdrawal followed a warning about the site's datacentre power supply. A month before Microsoft stepped away, it had emerged that the project would face a lengthy wait before coming online.

UK Power Networks, which owns the grid across London and the south-east, had told Nscale it could not supply enough power to the Loughton site until the early to mid-2030s.

A flagship of the UK's AI strategy

The project carried weight in government plans. When the UK announced its AI strategy in 2025, ministers described it as the "largest UK sovereign AI datacentre".

Construction had been slow to start: in March, the Guardian revealed that the location was still an operational scaffolding yard.

Nscale stays committed

Nscale has cleared the scaffolding yard site and is investigating onsite power generation and speeding up the connection process. Microsoft, meanwhile, remains on board for another Nscale project in Norway.

• An Nscale spokesperson said the company is exploring alternative power sources for the Loughton site.
• The spokesperson said the relationship with Microsoft remains strong and long-term, and that the grid issue has no impact on the company's other contracts.