A planned artificial intelligence data centre in Loughton, Essex, has lost its key customer. Microsoft has pulled out of its agreement with Nscale over concerns about power supplies, according to the Guardian. The move does not mean the entire development has been cancelled: Nscale says it remains committed to the project and is exploring alternative sources of power.
Microsoft was expected to be the facility’s anchor tenant and, according to the newspaper, was its only publicly announced customer. The Telegraph first reported the termination of the agreement. The Guardian reported the story on 18 October, but did not give an exact date for when Microsoft communicated its decision to Nscale.
In 2025, the government presented the British company’s development as the UK’s largest sovereign AI data centre — infrastructure designed to support artificial intelligence. The facility had been due to open in 2027. That was the previous plan, rather than a confirmed opening date following Microsoft’s withdrawal.
Nscale remains committed to Loughton
A spokesperson for Nscale said the company remained committed both to the Loughton project and to its UK operations. It is exploring alternative power sources for the site, as well as looking for other locations for expansion across the country. That commitment does not, however, mean the power supply problem has been resolved.
According to the spokesperson, Nscale’s relationship with Microsoft remains a long-term one, and the electricity grid issue in the London area does not affect the company’s other contracts. That is Nscale’s position; the report that power supply concerns prompted Microsoft to withdraw from the Loughton agreement comes from the Guardian.
For now, the distinction is important: the project has lost its announced anchor customer, but its developer has not announced that it is abandoning construction. No revised timetable has been given.
