Microsoft exits AI data centre project in Essex over power supply concerns — The Guardian

Microsoft has withdrawn from a major artificial intelligence data centre project that British company Nscale planned to implement in Loughton, Essex, United Kingdom. The reason was concerns over the site's power supply, The Guardian reports.

Loss of a key client

The Nscale project was announced in 2025, and Keir Starmer's government described it as the country's largest sovereign AI data centre. The facility in Loughton was planned to open next year.

Microsoft was one of Nscale's largest planned clients and was expected to become the data centre's key tenant. Following the termination of the agreement, Nscale lost the only publicly announced client for its Essex facility.

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Power grid problems

Problems with the power supply, which could significantly delay the launch of the data centre, became known a month earlier. In March, The Guardian also reported that a scaffolding yard was still operating at the planned site.

Nscale said it remains committed to the Loughton project and to operating in the United Kingdom. The company is exploring alternative power sources for the site, as well as other expansion options in the country. According to The Guardian, Microsoft remains involved in another Nscale project in Norway.

Nscale is backed by technology companies, including Nvidia. The loss of a key client could complicate Nscale's plans to list on Wall Street this year at a potential valuation of $35 billion.