Microsoft has withdrawn from an agreement to use Nscale’s planned artificial-intelligence datacentre in Loughton, Essex, removing the project’s expected anchor tenant and deepening doubts over its delivery. Nscale had planned to bring the site online next year after ministers presented it in 2025 as the UK’s largest sovereign AI datacentre.
The withdrawal follows a warning that the site may not receive enough electricity from the local grid until the early to mid-2030s. The delay has made the original launch timetable unworkable for Microsoft, which had been expected to lease computing capacity at the campus.
Nscale announced the Loughton project in September 2025 as part of a wider commitment involving Microsoft, Nvidia and OpenAI. The company said the campus would become the UK’s largest AI supercomputer when operational. By March 2026, however, the site was still being used as a scaffolding yard, and the physical location has since been cleared.
The loss of Microsoft leaves Nscale without another publicly identified customer for the Essex facility. Microsoft is understood to remain involved in a separate Nscale project in Norway. Nscale said its wider relationship with Microsoft remained strong and that the grid problem was specific to the London area rather than its other contracts.
Nscale said it remains committed to Loughton and is examining alternative power sources, as well as ways to accelerate the grid connection. The company is also considering other UK expansion sites. The project’s future therefore depends on whether sufficient electricity can be generated or secured before the delayed network connection becomes available.
The setback also exposes a broader constraint on the UK’s attempt to expand AI infrastructure. Electricity-network operators have been reforming connection rules after a backlog left many large projects waiting for capacity, while Nscale’s own plans describe Loughton as a high-density GPU campus requiring substantial power and specialist cooling. In April, the government said delivery and commercial plans for the proposed site were matters for the private investor to confirm, even as it continued to support the sector’s expansion.