Microsoft pulls out of Nscale UK data center deal over power delays
What happened
Microsoft has terminated its agreement to anchor Nscale's planned £2 billion data center in Loughton, Essex, after UK grid officials told Nscale the site would not receive sufficient power until the 2030s. The Telegraph first reported the termination on Sunday, October 18; Microsoft and Nscale confirmed it on Monday, October 19. Both companies stressed the decision relates to a single site, that their broader relationship remains strong and long-term, and that it has no impact on other contracts. Nscale said it remains committed to the Loughton project and is exploring alternative power sources.
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Start your free 14-day trialWho’s affected
- Microsoft (MSFT) — limited direct financial impact; the deal was a single site and the partnership continues, but it exposes execution risk in its Azure capacity expansion
- Nscale (pre-IPO, ticker NSCL filed) — direct hit: loses the anchor tenant for its first UK site ahead of its IPO, leaving Loughton with no announced customer
- Neoclouds (CoreWeave, Nebius, Crusoe, Lambda) — shows hyperscaler customers can walk away when projects slip, threatening revenue streams built on huge contracted backlogs
- Nvidia (NVDA) — the site was to house 23,040 GB300 GPUs; delayed deployments slow the conversion of AI orders into revenue