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Microsoft pulls out of Nscale's planned UK AI data center after grid connection slips to the 2030s
Microsoft has ended its deal to anchor Nscale's planned 50 MW AI data center in Loughton, England, after the local grid operator reportedly said enough power may not be available until the early to mid-2030s; both companies say other projects are unaffected.
Evidence: 3 sources · 3 independent reports · 3 open questions
| When | Event |
|---|---|
| 2025 | Loughton campus announced (50 MW planned, scalable to 90 MW) |
| 2027 | Revised planned opening |
| 19 October 2026 | Microsoft withdraws |
| Early to mid-2030s | Sufficient grid power, as reportedly told to Nscale |
What happened
- On 19 October, Reuters reported that Microsoft had withdrawn from its deal to anchor Nscale's planned data center in Loughton, Essex. The Telegraph first reported the move.
- The Loughton campus was planned at 50 MW of capacity for Microsoft Azure, with room to scale to 90 MW.
- The distribution network operator, UK Power Networks, reportedly told Nscale that sufficient power would not be available until the early to mid-2030s.
- Microsoft said the decision relates to a single site. Nscale said it has no impact on its other contracts.
Why it matters
It is a clear example of grid connections, not chips or money, setting the pace for AI data centers, and it comes from a country whose government has promoted AI infrastructure as a priority.
What is confirmed and what is claimed
Confirmed
- Microsoft has withdrawn from the Loughton deal (Reuters; also reported by Network World and Data Center Knowledge, citing statements from both companies). 123
- Microsoft described the decision as relating to a single site and said it remains committed to its partnership with Nscale (Microsoft statement, reported by Network World). 2
- Nscale said the London-wide grid issue does not affect its other contracts and that it is exploring alternative power sources for the site (Nscale statement to Reuters). 1
- The site was planned at 50 MW, scalable to 90 MW, with Microsoft as its only publicly announced customer (Reuters and trade reports). 1
Claimed, not independently verified
- The early-to-mid-2030s power date comes from reports of what UK Power Networks told Nscale. The operator declined to discuss the individual project.
- Nscale says its Microsoft projects in Norway, Portugal, and the United States are unaffected.
Microsoft has walked away from its role as anchor customer for a data center that Nscale, a UK-based AI infrastructure company, planned to build in Loughton, Essex. The reason given in reporting is simple: the site cannot get enough electricity for years.
Nscale had planned the campus at 50 megawatts of capacity for Microsoft's Azure cloud, expandable to 90 MW. Those figures describe how much power the site could draw at once, not how much energy it would use over a year. The site's opening had already been revised to 2027. According to reports, UK Power Networks, which runs the local distribution network, told Nscale that sufficient power would not arrive until the early to mid-2030s. The operator declined to comment on the project and pointed to constraints on the wider transmission system.
Context
Grid connection queues have become one of the main limits on data center growth in Britain, the United States, and elsewhere. The International Energy Agency said in April 2026 that physical bottlenecks were increasingly limiting how fast data centers can expand. A 50 MW campus is modest by the standards of the largest US projects, which makes the delay notable: even mid-sized sites near London are waiting years.
For how capacity and consumption figures differ, see our explainer on AI energy use.
What to watch
- Whether Nscale secures on-site or alternative power for Loughton, and whether a new customer signs on.
- Any response from the UK government or the energy regulator on connection queues for data centers.
- Whether other planned sites in the London area report similar delays.
What we don’t know yet
- Whether Nscale can find another power source or another customer for the Loughton site, and on what timeline.
- Whether Microsoft will move the planned UK capacity to another site.
- How many other planned UK data centers face similar connection dates.
Evidence and sources
- Independent reporting Microsoft pulls out of UK Nscale data centre deal over power delay
- Independent reporting Microsoft exits UK AI data center project over electricity delays
- Independent reporting Nscale Loses Microsoft Deal as Power Delays Threaten AI