Microsoft Exits 2.67 Billion Loughton AI data center as Grid Connection Slips to the 2030s

Microsoft has withdrawn from Nscale's planned AI data center in Loughton, Essex, a project the company has pledged USD 2.67 billion to build and which is set to be the UK's largest AI facility. The withdrawal comes as Nscale has been told the site will not receive its power supply until the 2030s, years later than originally planned, the BBC understands. Microsoft declined to comment when approached.

Nscale Insists the Essex Project will Continue

Although Microsoft has stepped away from the Loughton development, Nscale maintains the project is going ahead. A spokesperson for the company said: "We remain committed to both the Loughton project and the UK and we are exploring alternative power sources for the site, in addition to other expansion sites in the UK."

The spokesperson also sought to play down any lasting damage to the commercial relationship, adding: "Our relationship with Microsoft remains strong and long-term." The two firms are still working together on other ventures. Collaboration continues on projects in Norway, Portugal and the United States, and Nscale said its relationship with Microsoft remains strong for those overseas developments.

Grid Delay Prompts Search for Alternative Power

The data center had originally been scheduled to receive its power supply at the end of this year. Nscale has now been informed that the connection will not arrive until the 2030s. Nscale blamed what it called a "London-wide grid issue" for the delay.

The company said, "This unfortunate London-wide grid issue has no impact on our other contracts." It is in response to this power problem that Nscale says it is looking at alternative power sources for the Loughton site. The company has also indicated it is considering other expansion sites across the UK.

Microsoft's Withdrawal Follows a USD 30 Billion UK Investment Pledge

The decision to pull out comes barely a month after Microsoft announced that part of the USD 30 billion it is investing in the UK would be used to fund the Loughton supercomputer. That commitment formed part of a broader wave of US technology investment in Britain. In related coverage of the investment wave, Nvidia's boss said the UK would be an "AI superpower" as technology firms committed billions of pounds to the country.

What the Loughton facility was set to deliver

Nscale announced last year that it had pledged USD 2.67 billion to build and open the pioneering AI facility in Loughton. Once open, the site is expected to create 250 permanent jobs. Earlier plans for the USD 2.67 billion AI center in Essex had been linked to 750 jobs, according to a related BBC story at the time of the project's announcement. Nscale has described the facility as set to be the UK's largest AI data center.

The road ahead for the project

With Microsoft gone and the grid connection now delayed into the 2030s, the future of the Loughton site rests largely on Nscale's ability to secure an alternative source of power. The company maintains that the grid issue has no impact on its other contracts and says it is continuing to explore expansion elsewhere in the UK. Microsoft, for its part, has declined to comment on its decision to withdraw, leaving Nscale to carry the Essex development forward without its original supercomputing backer.