Microsoft has cancelled its involvement with Nscale’s £2 billion UK data centre after concerns over the site’s grid connection, the companies have confirmed.

The Loughton, Essex data centre was announced last year with Microsoft as an anchor tenant, and is intended to be the UK’s largest site. However, as first reported by the Telegraph, Microsoft withdrew its commitment after being informed that it would not be connected to the grid until the 20230s.

This has not impacted the companies’ other joint projects, Nscale said. It previously announced partnerships for data centres in Norway, Portugal and Texas at the same time as its Loughton site.

An Nscale spokesperson told NTN: “We remain committed to both the Loughton project and the UK and we are exploring alternative power sources for the site, in addition to other expansion sites in the UK.

“Our relationship with Microsoft remains strong and long-term, and this unfortunate London-wide grid issue has no impact on our other contracts.”

NTN has reached out to Microsoft for comment.

The Loughton site was originally supposed to begin operating in 2027, with 23,000 GB300 Nvidia GPUs earmarked for Microsoft.

Nscale, founded in 2024 as a spinout of crypto mining company Arkon Energy, is one of the UK’s leading hyperscalers, with involvement in projects around the country. Last month, it filed to go public on the New York Stock Exchange, targeting a reported price of $35 billion according to the Financial Times.

The company has raised billions of dollars for its projects, and its founder and chief executive, Josh Payne, said in September that it had a total contracted value of $103 billion.

However, it has faced a number of setbacks in recent months, including Guardian reporting in March that the Loughton site was still a scrap metal yard and partner OpenAI pulling out of its planned £31 billion Stargate UK data centre in April.

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