Microsoft has pulled out of an agreement to use computing capacity at Nscale’s planned AI data centre in Loughton, Essex. This means Microsoft will no longer be the site’s main announced customer.
The project is also facing a major power problem. The site may have to wait much longer than expected to get enough electricity from the grid. Microsoft has not said why it left the agreement, but the power delay has become the biggest challenge facing the project.
The wider issue is simple: companies can buy powerful AI chips and raise money quickly, but building the electricity infrastructure needed to run large AI data centres can take many years.
When the Loughton project was announced in September 2025 it was a part of Microsoft and Nscale’s plan to grow AI infrastructure in the UK. Nscale said the campus would start with 50MW of AI capacity and could grow to 90MW. Nscale also planned to host 23,040 Nvidia GB300 GPUs from the quarter of 2027 to support Microsoft Azure services. Microsoft later added the supercomputer to its $30 billion UK investment programme with half of that money earmarked for cloud and AI infrastructure showing how important the site was originally.
The biggest challenge now is not getting computing hardware. Getting electricity. UK Power Networks has said the Loughton site might not get grid capacity until the early 2030s and some reports say it could be as late as the early‑to‑mid 2030s. That is a change from the original plan to start operations around 2027 creating a gap of several years between the planned GPU deployment and the power needed to run them.
Nscale has not given up on the Loughton project. Nscale says it still wants to develop the site and grow its UK infrastructure base while looking for power sources and ways to speed up access to enough electricity. Nscale is also looking at UK sites as part of its overall expansion plan. Importantly Nscale says the grid limits at Loughton do not affect its deals with Microsoft showing that the issue is only at this site and not the wider partnership.
That point matters because Loughton is one piece of the larger Microsoft–Nscale relationship. In October 2025 Nscale announced a deal with Microsoft that would cover about 200,000 Nvidia GB300 GPUs across Europe and the US with projects in Texas, Portugal and Norway. Microsoft’s exit from Loughton does not mean the end of the partnership but it does mean a key customer is gone from a UK site that had been presented as a flagship AI supercomputer project.
The Loughton story shows that building AI infrastructure depends on more than buying GPUs and money. Large AI clusters also need electricity, grid capacity, cooling, networking and building work to happen at the same time. For Nscale the next step is to find another power solution and a commercial plan, for Loughton that can keep the planned 50MW‑to‑90MW campus moving forward. AI compute can be arranged quickly. The infrastructure to power it can take years.
Source : Financial Times
