Microsoft exits Nscale’s planned Essex data center deal

The Telegraph reported that Microsoft informed Nscale it was ending its agreement for the planned Loughton data center.[1] Microsoft had been expected to serve as the anchor tenant at Nscale’s first British data center, and had agreed to rent 23,000 Nvidia AI chips there.[1] Nscale’s plan specified 23,040 Nvidia GB300 GPUs for delivery in the first quarter of 2027.[3] The site was designed for 50 megawatts of AI capacity, with an option to scale to 90 megawatts.[3] Nscale said the facility would provide capacity for Microsoft Azure services across the UK.[3]

The Loughton site was originally intended to come online the year after the Telegraph’s 2026 report.[1] But grid officials told Nscale they did not expect to supply power to the site until the 2030s.[1] UK Power Networks gave a more specific estimate, saying it could not supply enough power until the early to mid-2030s.[2] Nscale said it was exploring alternative power sources for Loughton and other UK expansion sites.[2] The company had cleared the site, previously a scaffolding yard, and was investigating onsite power generation and ways to speed up the connection process.[2]

The Guardian reported that Microsoft’s withdrawal left Nscale without another publicly announced customer for the Essex data center.[2] Nscale said the Loughton grid issue did not affect its other contracts.[2] Microsoft also remained involved in a separate Nscale project in Norway, while Nscale described its relationship with Microsoft as strong and long-term.[2] The Telegraph reported that more than 40% of Nscale’s $103 billion in contracted revenue came from Microsoft, though the UK agreement was believed to represent a small part of that revenue.[1] The Telegraph also identified Anthropic as another major Nscale customer.[1]

The Telegraph reported that Microsoft’s withdrawal threatened Nscale’s effort to pursue a Wall Street listing valued at up to $35 billion.[1] The Guardian said Nscale could pursue a listing this year at a potential $35 billion valuation.[2] Those reports describe a potential listing, not a completed transaction. Microsoft’s backing for Loughton had formed part of its pledge to invest £22 billion in the UK, according to the Telegraph.[1] Nscale described Loughton as the UK’s largest AI supercomputer once it goes live.[3] The project’s schedule and power plan remain important factors for customers assessing when that planned capacity could be used.[1][2][3]