Microsoft withdrew from participating as the main customer of a large artificial intelligence data center developed by British company Nscale in Loughton, in the county of Essex, after problems with electricity supply. The withdrawal, reported on October 18 by The Guardian, leaves the venture without its only publicly announced customer.
The project had been presented in September 2025 as part of the British strategy to expand its AI infrastructure. The facility was expected to house 23,040 Nvidia GB300 GPUs, intended to provide computing capacity for Microsoft Azure cloud services.
The plan called for 50 megawatts (MW) of initial capacity, with the possibility of expansion to 90 MW. Nscale had announced the arrival of the first equipment for the first quarter of 2027, but difficulties connecting to the power grid compromised the schedule.
Microsoft's exit represents an important commercial loss for Nscale, which had counted on the company as an anchor customer for the venture. The project had also been highlighted by the British government as part of investments aimed at strengthening national AI processing capacity.
50 MW project could remain without a power connection until the 2030s
The main difficulty lies in the power distribution infrastructure. According to information reported by the Guardian, regional operator UK Power Networks informed Nscale that the necessary power capacity might not be available before the early or mid-2030s.
The contrast with the original planning is significant: while the facility was expected to start receiving GPUs in early 2027, the necessary power connection could take several additional years. The timeframe provided by the operator refers to the availability of power from the grid, not to a new official opening date.
The venture's difficulties were already known. In March 2026, the Guardian identified that the land intended for the data center was still functioning as a scaffolding storage yard. Since then, Nscale has cleared the site, but the energy problem has remained without a definitive solution.
Despite the loss of the contract, Nscale says it has not abandoned the project. In a statement to the Guardian, a spokesperson said the company remains committed to Loughton and is investigating alternative sources of electricity, including the possibility of on-site generation and of bringing forward the grid connection.
The company also stressed that the impasse does not affect its other contracts with Microsoft. The two companies maintain other AI infrastructure agreements, including a project in Norway.
The withdrawal comes as Nscale prepares its entry into the U.S. stock market. The company, backed by investors such as Nvidia, is seeking to expand its international infrastructure, but the episode in Essex demonstrates a concrete limitation: the availability of advanced processors and commercial contracts does not guarantee that a data center can begin operating without sufficient power capacity.
