Microsoft has abandoned its planned tenancy at Nscale’s Essex AI data centre after reports that adequate electricity supplies could remain unavailable until the 2030s.
The Loughton project was supposed to help power Britain’s AI ambitions. Unfortunately, somebody appears to have announced the operation before sorting out the juice to power it.
According to the Financial Times, Microsoft cancelled its agreement to lease the site’s entire initial 50MW capacity, leaving Nvidia-backed Nscale searching for another tenant
Nscale’s October 2025 announcement promised about 23,000 Nvidia GB300 GPUs at Loughton from the first quarter of 2027. The facility would support Microsoft Azure services, with capacity eventually expandable to 90MW. It formed part of a wider agreement covering approximately 200,000 GPUs across Europe and the US.
Those delivery plans now face the awkward constraint that graphics processors require electricity, regardless of how enthusiastically ministers applaud them.
The Times reported that UK Power Networks had informed Nscale that sufficient grid power would be unavailable until the early 2030s. The site had been promoted as Britain’s largest sovereign AI datacentre.
The cancellation comes as Nscale pursues a New York flotation targeting a $35 billion valuation. Former UK deputy prime minister Nick Clegg and former Meta chief operating officer Sheryl Sandberg sit on its board,
Losing the planned tenant creates an immediate commercial problem alongside the engineering delay. Investors invited to fund AI infrastructure may expect it to turn on.
Nscale maintained that its wider relationship with the software giant remained intact.
“Our relationship with Microsoft remains strong and long-term, and this unfortunate London-wide grid issue has no impact on our other contracts,” an Nscale spokesperson said.
The company is exploring alternative electricity supplies for Loughton and other potential UK expansion sites.
