Microsoft Withdraws from Essex
Microsoft has withdrawn from a planned role as the anchor tenant at a major artificial intelligence data centre being developed by British firm Nscale in Loughton, Essex. The project, valued at around £2 billion and previously described as the UK’s largest AI data centre, had been expected to host a large-scale supercomputer for Microsoft.
The facility was due to come online around late 2026 or early 2027, with plans for roughly 23,000 Nvidia GB300 GPUs delivering about 50 megawatts of AI computing capacity (and a total power allocation of up to 90 MW). It formed part of Microsoft’s broader AI infrastructure investments in the UK and was highlighted by the government in its 2025 AI strategy.
The withdrawal follows significant delays in securing a grid connection. UK Power Networks has indicated that sufficient electricity for the site is not expected until the early to mid-2030s because of wider capacity constraints on the London and south-east grid. Nscale first learned of the extended timeline in 2025, pushing back the original opening target.
Nscale has said it remains committed to the Loughton project and to the UK more broadly. The company is exploring alternative power sources for the site, along with other expansion locations, and has stated that its long-term relationship with Microsoft is unaffected for their other joint projects.
Microsoft has confirmed that the decision applies only to this single site and that it continues to partner with Nscale on digital infrastructure and AI growth elsewhere. The US company declined to comment further on the specific reasons for exiting the Essex agreement when first approached by reporters
The withdrawal follows significant delays in securing a grid connection. UK Power Networks has indicated that sufficient electricity for the site is not expected until the early to mid-2030s because of wider capacity constraints on the London and south-east grid. Nscale first learned of the extended timeline in 2025, pushing back the original opening target.
Nscale has said it remains committed to the Loughton project and to the UK more broadly. The company is exploring alternative power sources for the site, along with other expansion locations, and has stated that its long-term relationship with Microsoft is unaffected for their other joint projects.
Microsoft has confirmed that the decision applies only to this single site and that it continues to partner with Nscale on digital infrastructure and AI growth elsewhere. The US company declined to comment further on the specific reasons for exiting the Essex agreement when first approached by reporters.
The episode highlights the growing practical constraint that electricity supply is placing on AI data centre development in the UK. Hundreds of data centre projects are currently queued for National Grid connections, with total requested capacity far exceeding the country’s existing peak demand. Similar bottlenecks have affected other Nscale sites, including its flagship facility in Norway.
While Nscale has cleared the former scaffolding-yard site and holds planning permission, the loss of its only publicly announced customer for the Essex facility adds uncertainty just as the company prepares for a potential US initial public offering, where Microsoft and Anthropic have been named among its major customers.
