Microsoft has withdrawn from its commitment to anchor the Nscale AI datacentre project in Loughton, Essex, citing concerns over the delayed provision of electrical power. The decision marks a significant setback for Nscale's plans to develop what was heralded as the United Kingdom's largest AI datacentre. UK Power Networks, responsible for the regional electricity grid, informed Nscale that a sufficient power supply would not be available until the early to mid-2030s, a timeline that proved unworkable for Microsoft's immediate needs.
The Loughton facility was announced in 2025 as a key component of the UK's AI strategy, with Nscale planning to invest approximately £2 billion in its development. Microsoft had intended to establish a supercomputer at the site as part of its broader $15 billion investment in UK AI infrastructure. The project was designed to support high-density GPU computing, with an initial capacity of 50MW, scalable to 90MW, and was engineered to host tens of thousands of NVIDIA GB200 GPUs. Nscale stated that its relationship with Microsoft remains strong and that the company is exploring alternative power solutions for the Loughton site, as well as other expansion opportunities within the UK.
This power supply issue is not unique to Nscale's Loughton project. The UK's electricity grid infrastructure is facing significant strain due to the increasing demand from datacentres and other energy-intensive industries. Reports indicate that grid connection queues can cause delays of up to 13 years for new datacentre developments. Previously, OpenAI also withdrew from a project with Nscale, citing energy-related issues. Nscale, which has roots in bitcoin mining operations, has been adapting its expertise to meet the demands of AI infrastructure development, which requires substantially more power and complex energy solutions.
The withdrawal of Microsoft, a key anchor tenant, places pressure on Nscale's ambitions, including a potential initial public offering on Wall Street. While the company remains committed to the Loughton project, the extended timeline for power connection highlights a broader challenge for the UK's AI sector, which relies heavily on a stable and sufficient energy supply. Nscale is investigating options such as on-site power generation to circumvent the grid connection delays.