Microsoft exits Nscale UK data center deal over grid power delays

Microsoft has terminated its anchor tenant agreement for a planned data center in Loughton, Essex, run by Nscale. Tech Times and CoinDesk reported that UK Power Networks informed the British artificial intelligence startup that grid electricity for the site would not be available until the early-to-mid 2030s. An Nscale spokesperson confirmed to The Information that Microsoft pulled out after facing delays in accessing power to bring the site online. [1][4][6]

The Loughton facility was designed as a 90-megawatt site. According to CoinDesk, the project was intended to house 23,040 Nvidia graphics processing units and provide 50 megawatts of computing capacity to Microsoft Azure cloud by early 2027. Finextra reported that the project was planned to be the largest data center in the United Kingdom. [1][2][4]

Nscale was spun out of a bitcoin mining business and secured backing from Nvidia. TechInAsia reported that Nscale raised 3.36 billion dollars in a pre-initial public offering funding round led by Third Point last month. TechInAsia also noted that Nscale listed both Microsoft and Anthropic as expected major customers in its United States initial public offering prospectus. [3][4][5]

The sudden loss of its anchor tenant threatens the credibility of Nscale's pending listing. Tech Times, Dealroom, and Briefs Finance reported that the startup is pursuing a 35 billion dollar initial public offering, while TechInAsia put the valuation target at 30 billion dollars. The Information reported that the contract cancellation is likely to weigh on the public offering scheduled for this month as investor concerns grow. [1][5][6][7][11]