Microsoft Withdraws from Nscale AI Datacentre Project in Essex

Summary

Microsoft has withdrawn from Nscale’s planned AI datacentre in Loughton, Essex, where it was expected to be the anchor tenant. The project was announced in 2025 and promoted by the UK government as the country’s largest sovereign AI datacentre, with an intended opening next year. The withdrawal follows news that UK Power Networks cannot provide enough electricity to the site until the early to mid-2030s, creating a lengthy delay before the facility could come online. Microsoft remains involved in another Nscale project in Norway, and Nscale said its broader relationship and other contracts were unaffected. The departure leaves Nscale without a publicly announced customer for the Essex facility. The company says it remains committed to the project, has cleared the former scaffolding-yard site, and is examining onsite generation and ways to accelerate the grid connection. Nscale is backed by technology companies including Nvidia and has been central to the UK’s sovereign AI strategy alongside CoreWeave. The setback also raises pressure on Nscale’s planned New York flotation, which could value it at $35bn, while adding to wider concerns about debt-financed neocloud companies and the power constraints facing datacentre expansion.