Microsoft has withdrawn from an agreement to use Nscale’s planned artificial-intelligence data center in Loughton, Essex, dealing a setback to a project once promoted by the British government as the country’s largest sovereign AI facility. The site was announced in 2025 and was expected to open next year, but electricity constraints have delayed its path to operation.
Microsoft had been expected to serve as the facility’s anchor tenant and was Nscale’s only publicly announced customer for the Essex site. Microsoft remains involved in a separate Nscale project in Norway. Nscale said its relationship with Microsoft remains strong and that the London-area grid problem has not affected its other contracts.
Nscale said it remains committed to Loughton and is examining alternative power sources, along with other locations for expansion in the United Kingdom. Earlier doubts about the project included the site’s reported status as an operational scaffolding yard in March, followed by reports that power-supply problems could cause a lengthy wait before the facility comes online.
Reported problems there include cooling-system leaks, regulatory delays, construction setbacks and a fire, leaving the company’s proposed listing tied to projects whose customer commitments and operating capacity are still developing.