Microsoft quits Nscale's Essex AI data centre project over power supply concerns

Microsoft has withdrawn from Nscale’s artificial intelligence data centre project in Loughton, Essex, over concerns about the site’s power supply.

The development had been due to open next year, with Microsoft expected to serve as its anchor tenant and among Nscale’s largest planned customers. A month before the company’s withdrawal, it emerged that power problems would leave the project facing a lengthy wait before it could come online.

The site had been given a prominent role in the government’s technology plans. When the project was announced in 2025, UK ministers hailed it as the country’s largest AI data centre. Keir Starmer’s government later highlighted the Loughton scheme in its 2025 AI strategy, calling it the largest UK sovereign AI data centre.

In March, The Guardian reported that the location was still operating as a scaffolding yard.

Microsoft’s departure leaves Nscale without a publicly announced customer for the Essex data centre. Microsoft remains involved with a separate Nscale project in Norway.

Nscale has presented itself as Britain’s sovereign data centre provider and is backed by technology companies including Nvidia. It has planned to float on Wall Street this year at a potential valuation of $35bn (£26bn).

An Nscale spokesperson said the company remained committed to the Loughton project and to the UK. The company is exploring alternative power sources for the site, alongside other possible UK expansion locations, the spokesperson said.

The spokesperson said Nscale’s relationship with Microsoft remained strong and long-term, and described the problem as a London-wide grid issue.