Microsoft withdraws from Nscale's UK data centre project amid power delays

Microsoft announced it will not proceed with the planned data centre partnership with British neocloud provider Nscale in Loughton, Essex. The decision comes as the site faces a series of delays, including a grid issue that could postpone power delivery until the 2030s. Nscale's flagship Norwegian centre is already six months behind its target, operating only 6.4 MW of the intended 30 MW capacity. Relying on Microsoft and Anthropic for roughly 85 % of its contracts, Nscale had hoped to secure up to US$3 billion in an initial public offering as soon as October.

The loss of Microsoft as an anchor tenant jeopardizes that fundraising effort and heightens investor wariness about the broader AI data-centre build-out. Nscale's spokesperson emphasized the company's continued commitment to the UK project and its search for alternative power sources, while noting that the grid issue does not affect other contracts. The setback mirrors recent challenges for other AI-focused cloud firms, such as CoreWeave and Firmus, which have also faced market and financing headwinds.