Microsoft cancels UK AI data centre deal over grid delays

Microsoft has pulled out of an agreement to be the anchor tenant at Nscale's new AI data centre in Loughton, Essex. The American tech giant accounts for 40 per cent of Nscale's contract revenue and had agreed to rent 23,000 high-end AI microchips at the site.

The deal was part of a $30 billion commitment Microsoft announced during Donald Trump's state visit to the UK just over a year ago. Of that sum, $2 billion was allocated to the Loughton project.

“This unfortunate London-wide grid issue has no impact on our other contracts.”

Grid executives now predict no power supply until the 2030s, despite the facility originally being scheduled to come online next year. Photographs from March showed the proposed location was still a functioning scaffolding yard.

The cancellation threatens Nscale's planned multibillion-dollar flotation on the New York Stock Exchange, which targets a $35 billion valuation. Board member Nick Clegg owns 917,000 shares, or 0.12 per cent equity, and stood to receive up to £30 million if the IPO succeeded.

Nscale said the grid issue has no impact on its other contracts, which are based in alternative locations outside the UK such as Norway, Portugal and the US.