Microsoft has withdrawn from plans to construct the UK's largest AI data centre in a joint venture with Nscale, leaving the London-based firm searching for alternative partners for the flagship development in Loughton, Essex.
The global tech giant, which had previously committed to funding a supercomputer at the site, has ended its ties with the partnership. Nscale had pledged £2bn to build and operate the facility, a project first unveiled last year and highlighted by former Prime Minister Sir Keir Starmer within the UK's AI strategy in 2025.
Power supply concerns prompt exit
Concerns over power supply have prompted Microsoft — widely regarded as the anchor tenant for the centre — to walk away from its side of the deal. Despite the withdrawal, Nscale said: "Our relationship with Microsoft remains strong and long-term." The two companies continue to maintain partnerships across Europe and the United States.
Nscale's growth and financial position
Founded in London and backed by global tech heavyweights including Nvidia, Nscale has positioned itself as Britain's "sovereign" data centre operator. The loss of Microsoft from the Loughton project delivers a timely setback to the firm just as it prepares for a high-profile listing in New York.
The company is planning to float on the New York Stock Exchange — with reports suggesting a target valuation of up to $35bn — while retaining its British domicile. The London-headquartered company, whose board includes former deputy prime minister Nick Clegg and ex-Meta executive Sheryl Sandberg, posted a net loss of $1bn against revenues of $141m in the first six months of the year, with the majority of losses stemming from non-cash charges.
Valuation and next steps
In March the business was valued at approximately $14.6bn in a funding round spearheaded by Norwegian energy firm Aker and 8090 industries. Nvidia, Dell and Nokia also took part in the round. Microsoft was approached for comment.
