Microsoft withdraws from UK AI datacentre project over power concerns

Summarised from 2 outlets · Updated 18 Oct, 19:19 · Archive

Microsoft has pulled out of a major AI datacentre project in Essex planned by British firm Nscale, citing power supply concerns.

Microsoft has pulled out of its deal to anchor a major AI datacentre project in Loughton, Essex, developed by British firm Nscale. The company cited concerns over construction delays and power supply. Microsoft was due to rent 23,000 high-end AI chips at the facility and accounted for 40 per cent of Nscale's contract revenue.

The datacentre was heralded by the UK government in 2025 as the country's largest AI datacentre when it was announced as part of the UK's AI strategy. It was originally planned to open next year. However, power supply is now not expected until the 2030s according to grid executives, representing a significant delay.

The project has faced repeated difficulties. The Guardian revealed in March that the proposed location was still an operational scaffolding yard. Microsoft's withdrawal means Nscale has lost its only publicly announced customer for the Essex site. Nscale, backed by tech companies including Nvidia, filed for a multibillion-dollar flotation on the New York Stock Exchange in September, targeting a valuation of $35 billion. Microsoft remains involved in another Nscale datacentre project in Norway.

How it is being reported

• Microsoft pulls out of AI deal for UK data centre firm in move that could deprive Nick Clegg of £30million payoutThe American tech giant was due to be the 'anchor tenant' at the AI infrastructure company's first planned UK site in Loughton, Essex, where it had agreed to rent 23,000 high-end AI chips.Daily Mail · 18 Oct, 19:05
• Microsoft drops huge AI datacentre project in Essex over power supply concernsDevelopment by UK firm Nscale heralded by ministers as largest of its kind in the country loses its anchor tenant The development of a huge AI datacentre hailed by the UK government has received a fresh setback after Microsoft pulled out of the project over concerns about power supplies. The development by the British firm Nscale, heralded by ministers as the country’s largest AI datacentre when it was announced in 2025, was planned to open at Loughton in Essex next year. Continue reading...Guardian World · 18 Oct, 13:28

In this story: Microsoft · Nscale · Loughton · Essex · UK · Nvidia · Keir Starmer · Nick Clegg

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