Microsoft exits Nscale's Essex AI data center over UK grid delays, report says
In brief
- Microsoft ended its Loughton anchor-tenant agreement on October 18, 2026, Crypto Briefing reported.
- UK Power Networks reportedly said adequate grid power wouldn't arrive until the early to mid-2030s.
- Nscale's site planned 50 MW initially, up to 90 MW, with 23,040 Nvidia GB300 GPUs.
- Microsoft's Norway, Portugal and US contracts with Nscale aren't affected, the company said.
- LeoDex News couldn't independently verify the report.
What was planned for Loughton
AI infrastructure company Nscale was developing the facility, which was meant to supply computing power to Microsoft's Azure cloud business, Crypto Briefing reported. It's a big site on paper. According to the outlet, the plan called for an initial capacity of 50 MW with room to expand to 90 MW, and servers holding 23,040 Nvidia GB300 GPUs dedicated to Azure workloads.
The project was pitched as the UK's largest sovereign AI data center (computing capacity located and controlled within the country's borders). It had been scheduled to open in late 2026 or early 2027.
That timeline no longer includes Microsoft.
Power, not chips
Crypto Briefing framed this as a grid problem. The outlet wrote that the reason wasn't a chip shortage, a funding gap or a change in strategy. It also noted the UK grid's connection backlog, saying some projects have reportedly waited up to 13 years to be hooked up.
Nscale is exploring on-site generation options, including fuel cells, to power Loughton, according to the report. The company says it's still pursuing expansion opportunities elsewhere in the UK.
In Crypto Briefing's telling, the project was closely tied to the government's goal of positioning the UK as a leader in AI, an ambition showcased during US-UK tech diplomacy events in 2025.
Microsoft and Nscale's wider ties
Microsoft said its broader partnership with Nscale remains strong, as reported by Crypto Briefing, and its contracts covering projects in Norway, Portugal and the United States aren't affected by the Loughton decision. The Norway project has timing issues of its own, though. Nscale's flagship site there is running behind, with 6.4 MW of its planned 30 MW operational, the outlet reported.
Nscale's own finances lean on these deals. The company filed for a US IPO in September 2026 targeting a valuation of up to $35 billion, according to Crypto Briefing, and that valuation rests primarily on its contracts with Microsoft and Anthropic.
Frequently asked questions
Why did Microsoft pull out of the Loughton AI data center?
According to Crypto Briefing, UK Power Networks told the project that adequate grid power wouldn't reach the site until the early to mid-2030s. The data center had been scheduled to open in late 2026 or early 2027. LeoDex News couldn't independently verify the report.
Does this affect Microsoft's other Nscale projects?
Microsoft said its wider partnership with Nscale remains strong, as reported by Crypto Briefing. Its contracts with Nscale covering projects in Norway, Portugal and the United States were reported as unaffected by the Loughton decision.
