Microsoft has reportedly withdrawn from an agreement with AI infrastructure company Nscale to use a planned data centre in Loughton, Essex, after delays to the site’s expected electricity connection threatened its delivery schedule.
According to Reuters and The Guardian, grid officials had indicated that electricity might not be available to the site until the 2030s. The facility had originally been scheduled to go live in late 2026, with subsequent plans pointing to an operational start in 2027.
Microsoft had planned to lease the facility’s entire initial 50-megawatt capacity, according to the Financial Times. The project was designed to support large-scale artificial intelligence workloads using 23,040 Nvidia GB300 graphics processing units (GPUs), with potential capacity to expand to 90 megawatts.
Nscale announced the project in September 2025 as part of its UK AI infrastructure plans. The company expected the Loughton facility to provide substantial computing capacity for Microsoft’s cloud services, but the reported grid connection timeline would leave the site unable to meet its planned schedule without an alternative power arrangement.
Nscale says it remains committed to the Loughton project and is exploring alternative electricity supplies for the site. The company has also said that the issue does not affect its other contracts with Microsoft, whose relationship with Nscale extends to infrastructure projects outside the UK.
Microsoft had not publicly confirmed that electricity delays were the reason for ending the Loughton agreement in the reporting available on 18 October. Reuters reported that Microsoft had not responded to its request for comment. The exact contractual reason for the withdrawal and the financial value of the agreement have not been disclosed in the reports reviewed.
The project has faced scheduling questions before. A March 2026 investigation by The Guardian reported that the intended site was still being used as a scaffolding yard and that planning permission had not yet been secured at the time. The company’s subsequent target was to bring the facility online between April and July 2027.
The Loughton development is affected by wider pressure on UK electricity connections. In July 2026, energy regulator Ofgem reported that applications for new electricity demand connections had increased to 125 gigawatts, with data centres accounting for at least 80 gigawatts of applications. Those figures represent requests for connections, not operational data-centre capacity.
Nscale has not announced that the Loughton project is cancelled or identified a replacement customer for the planned capacity. Its stated response is to pursue alternative power arrangements while maintaining its commitment to the site and its other contracts.
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