Microsoft withdraws from Nscale's AI data center in Essex

The UK's largest planned artificial intelligence facility has lost a key partner. The backdrop is problems with the power grid: the facility will not get electricity before the 2030s.

Microsoft has ended its involvement in Nscale's AI data center project in Loughton, Essex. BBC has established this. Microsoft was supposed to finance a supercomputer at the facility. As recently as September, it announced that it would allocate part of the $30 billion (£22 billion) it is investing in the UK to it. The company declined to comment.

Nscale announced the investment in 2025 and pledged £2 billion for it, or about PLN 10 billion. The facility was supposed to receive power by the end of this year. The first to report the change was The Telegraph: Nscale was told that electricity would not flow until the 2030s. According to City A.M. and industry outlet Bricks & Bytes, the project had planning permission and a secured 90 MW grid connection. Microsoft was named as its main client.

Nscale says it is not giving up on the construction. In a statement to the BBC, the company wrote that it remains committed to the project in Loughton and is looking for alternative power sources, as well as other locations in the country. It described the delay as an “unfortunate, London-wide grid issue” that does not affect its other contracts. The two companies are still cooperating on projects in Norway, Portugal and the United States. The facility in Loughton is expected to employ 250 people permanently after opening.

The Loughton case shows a broader problem. According to data from the UK energy market regulator Ofgem and grid operator National Grid cited by Bricks & Bytes, 315 data centers are waiting for connection to the British grid. Together, they have requested 73 GW. Peak electricity consumption across the whole UK is about 45 GW. More than 100 projects are considering building their own gas generators. Regulator Ofgem is analyzing a reservation fee of £237,500 to £712,500 for each megawatt of capacity for projects waiting in the queue.

For companies that buy computing power in the cloud, this is a signal that the pace of AI infrastructure expansion in Europe is increasingly being determined by power connections, not just available capital.