Microsoft exits UK data center deal amid power delays

Microsoft has withdrawn from a deal with British cloud provider Nscale for a data center in Loughton, Essex, where electricity supplies reportedly may not be available until the 2030s.

The US technology company recently terminated its agreement for the facility, Reuters reported on Sunday, citing Britain's Telegraph newspaper.

The Telegraph reported that the project had faced repeated delays and that Nscale had been told grid power would not be available until the 2030s. Microsoft declined to comment to Reuters.

The Loughton project featured in AI infrastructure announcements made around US President Donald Trump's state visit to Britain in September 2025. Nscale said at the time that the facility would support Microsoft's Azure services, with an initial delivery of Nvidia chips planned for early 2027.

During the visit, the UK and the US signed the Technology Prosperity Deal, covering cooperation in areas including artificial intelligence, quantum computing and civil nuclear energy.

Microsoft announced a $30 billion UK investment plan for 2025–2028, describing it as its largest commitment in the country. Half would fund cloud and AI infrastructure, including a planned supercomputer with Nscale, and the rest would support ongoing operations.

Nvidia-backed Nscale provides computing infrastructure and software for training and running AI models. It filed for a US initial public offering in September, according to Reuters.

Nscale said it remained committed to the Loughton project and was exploring alternative power sources and 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," a Nscale spokesperson told Reuters.

Separately, OpenAI paused plans for Stargate UK in April, citing energy costs and regulatory conditions.

The partnership with Nscale and Nvidia, announced in September 2025, envisaged computing infrastructure at several UK locations, including Cobalt Park in northeast England.

OpenAI said it would proceed when conditions supported long-term infrastructure investment.