Nscale has confirmed its intention to construct the United Kingdom's largest artificial intelligence data centre in Loughton, Essex, following the withdrawal of Microsoft from the project. According to MyJoyOnline, the tech company had previously pledged £2bn to build and open the pioneering facility, but Microsoft, which was set to fund a supercomputer at the site, has terminated its specific involvement. A spokesperson for Nscale stated that the company is exploring alternative power sources while maintaining a strong relationship with Microsoft for their other collaborative projects in Norway, Portugal, and the United States.
The delay in the project's timeline is attributed to a London-wide grid issue, as first reported by the Telegraph. MyJoyOnline notes that Nscale was informed that the power supply, originally expected at the end of the year, will not arrive until the 2030s. In response, Nscale described the situation as an "unfortunate London-wide grid issue" that does not impact its other contracts. The company emphasized its commitment to the Loughton project and the UK market, noting that it is also evaluating other expansion sites within the country.
Microsoft’s withdrawal comes shortly after the company announced that a portion of its $30bn investment in the UK would be used to fund the Loughton supercomputer. According to MyJoyOnline, Microsoft declined to comment on the specific termination of its role in this facility, though Nscale described their partnership as long-term. The Loughton site is expected to create 250 permanent jobs upon its eventual opening, sustaining the project's economic promise despite the shift in funding partners.
This development occurs against a backdrop of rapid growth in the global AI infrastructure sector. The International Energy Agency reported that capital expenditure for five large technology companies exceeded $400 billion in 2025 and is expected to rise by 75% in 2026. The agency noted that electricity demand from data centres soared by 17% in 2025, with AI-focused facilities growing even faster. While efficiency per AI task is improving, the surge in usage is straining planning and regulatory systems, leading to delays in grid connections and necessary approvals for new projects like the one in Loughton.