Microsoft has ended its agreement to be the anchor tenant at Nscale's planned AI data centre in Loughton, Essex, The Telegraph reported on October 18, 2026. Nscale confirmed it is looking for other power sources for the site and said its wider relationship with Microsoft is unaffected. Microsoft declined to comment. The loss comes weeks after Nscale filed for a US initial public offering.

Key Facts

Details
Site Nscale AI Campus, Loughton, Essex
Original deal Announced September 16, 2025: 50MW, scalable to 90MW, with 23,040 NVIDIA GB300 GPUs planned for Q1 2027
What changed Microsoft terminated the agreement, according to The Telegraph; the BBC says it "understands" the same
Microsoft Declined to comment to the BBC and Reuters
Power Grid operators told Nscale the site will not get enough power until the 2030s; The Guardian names UK Power Networks and says early to mid 2030s
Other Microsoft and Nscale projects Continue in Norway, Portugal and the US, per the BBC
Nscale IPO Filed in the US last month; The Telegraph and The Guardian put the possible valuation at up to $35bn

What Nscale Said

An Nscale spokesperson gave the same statement to the BBC, Reuters and The Guardian: "We remain committed to both the Loughton project and the UK, and we are exploring alternative power sources for the site, in addition to other expansion sites in the UK. Our relationship with Microsoft remains strong and long-term, and this unfortunate London-wide grid issue has no impact on our other contracts."

The Guardian reports that Nscale has cleared the site and is studying whether it can generate power on site or speed up its grid connection.

Background

Nscale and Microsoft announced the Loughton deal during President Trump's state visit to the UK in September 2025. Microsoft said the site would be the UK's largest supercomputer and counted it as part of its $30 billion UK investment for 2025 to 2028. The UK government had called it the largest UK sovereign AI data centre.

The project had already slipped. In March 2026 The Guardian reported that the site was still a working scaffolding yard. In September it reported the power delay that could push the opening, originally planned for 2027, into the 2030s.

According to The Telegraph, Microsoft was the only announced customer for Loughton. It reports that more than 40% of Nscale's $103 billion in contracted revenue comes from Microsoft, though the UK deal is believed to be a small part of that. Anthropic is Nscale's other large customer. The Telegraph says Nscale was privately valued at $15 billion.

What We Don't Know Yet

  • Why Microsoft withdrew. The Guardian ties it to power supply; Reuters notes that The Telegraph did not give a reason, and Microsoft has not commented.
  • Whether Nscale has found a new tenant or an on-site power plan for Loughton.
  • Whether the change affects the timing or size of Nscale's IPO.

Sources