Microsoft has withdrawn from an agreement to use Nscale’s planned AI datacentre in Loughton, Essex, removing the project’s expected anchor tenant and leaving the British company without a publicly announced customer for the site.
The withdrawal follows a warning from UK Power Networks that it cannot provide enough electricity for the facility until the early to mid-2030s. The delay is linked to work required on the wider national transmission network, despite the original plan for the centre to begin operating much earlier.
The Loughton site was still being used as a scaffolding yard in March 2026, although Nscale has since cleared it. The company is examining on-site generation and discussing whether the grid connection can be accelerated.
It also said its broader relationship with Microsoft remains strong and that the grid problem does not affect its other contracts, including work connected with projects outside Essex.
The planned facility was promoted by the UK government as part of its drive to build domestic AI infrastructure and increase sovereign computing capacity. Its setback highlights the practical constraint facing large AI projects: securing land and equipment does not guarantee access to the electricity needed to operate them.