Microsoft Leaves Nscale's Loughton Site Amid Grid Delays

What was reported on Sunday

Microsoft recently terminated its agreement for Nscale's data centre in Loughton, Essex, according to the Telegraph, in a report published on Sunday and summarised by Reuters the same day. The Guardian published a matching report on 18 October, framed around power supply concerns. Microsoft was the anchor tenant of the site and its only publicly announced customer. Following its reported withdrawal, Nscale has not publicly identified a replacement tenant for the site.

Two limits on the reporting belong in the first paragraphs, not the last. Microsoft declined to comment to Reuters. And Reuters is explicit that the Telegraph did not specify why Microsoft withdrew. The power explanation is an inference from the site's grid timeline, reported separately and consistently, not a reason Microsoft has given. It is a strong inference. It is still an inference.

From state-visit showpiece to a missing tenant

Loughton was not a quiet industrial project. Announced in September 2025 during a US presidential state visit, as part of a wider US-UK technology package, it was promoted by ministers as the largest sovereign AI data centre in the country. The original announcement described 23,040 Nvidia GB300 GPUs to be delivered for Microsoft's Azure platform from the first quarter of 2027, starting at 50 megawatts and expandable to 90. The project has been reported at £2 billion, with up to 250 permanent jobs.

The delivery record since then is a sequence of slippages that were all public before Sunday. In March, the Guardian found the site still operating as a scaffolding yard. In September, it reported that the grid connection, originally expected around the end of 2026, would not deliver sufficient power until the early to mid-2030s. The site has since been cleared, and Nscale says it is investigating on-site generation and ways to accelerate the connection. None of that produced a tenant willing to wait. A data centre needs more than chips and a construction site: it needs dependable electricity at the scale and date its customers require. Loughton's reported grid timetable shows how far a public infrastructure announcement can be from operating capacity.

The number that now does the work

Nscale filed for a US listing last month, and the figure its story runs on is contracted value: more than $103 billion in total, built up from $100 million in roughly two and a half years, with Microsoft and Anthropic named in the prospectus as major customers. Guardian-line reporting puts the valuation it is aiming at on Wall Street at up to $35 billion.

Loughton does not break that number, and this article should not pretend otherwise: no Loughton-specific contract value has been reported, and Nscale states its other Microsoft contracts are unaffected. What Loughton does is show what a contracted-value figure cannot tell you. The reported total does not by itself show how much capacity is already operating, how much is under construction, or when future contracted capacity becomes available, because those dates belong to grid queues and build schedules, not to either signatory. Loughton illustrates why those distinctions matter. It does not establish that the company's other contracts face the same delay.

Contracted value is a meaningful commercial metric. It is not interchangeable with operating capacity or realised revenue, and it is not recognised revenue, cash received, or guaranteed future realisation. What an investor needs behind the aggregate are the delivery schedules, the infrastructure dependencies, the customer concentration and the contractual conditions. Those are prospectus questions, and they are answerable ones: connection dates, energised megawatts versus contracted megawatts, and how much of the backlog depends on two customers. An investor who asks them is not doubting the signatures. They are asking what the signatures are dated in.

For the UK government, the embarrassment is narrower and more practical. The site it showcased as sovereign capacity faced a connection queue that was already public knowledge while the project was still being promoted, and sovereign AI capacity that arrives in the mid-2030s is a plan, not a capability. Microsoft's reported exit exposes the commercial uncertainty around a project promoted for a 2027 opening but facing a much later reported grid timeline. Whether that mismatch caused Microsoft's decision remains unknown.

Sources

[1] Reuters, "Microsoft pulls out of UK data center deal with Nscale, Telegraph reports", 18 October 2026 (updated wire) — termination of the Loughton agreement, Microsoft declined comment, the Telegraph did not specify a reason, grid power not expected until the 2030s per the Telegraph report, Nscale spokesperson statements in full (relationship with Microsoft strong and long-term, the grid issue has no impact on its other contracts, committed to Loughton and the UK, exploring alternative power sources), US IPO filed last month with Microsoft and Anthropic as major customers per the prospectus, contracted value scaling from $100 million to more than $103 billion in two and a half yearsRead source
[2] The Guardian, "Microsoft pulls out of AI datacentre project in Essex over power supply concerns", 18 October 2026 — power-supply framing, September reporting that power would not arrive until the early to mid-2030s, March scaffolding-yard finding, only publicly announced customer, more than 23,000 Nvidia GPUs, $35 billion (£26 billion) float targetRead source
[3] The Guardian report as summarised by demokratis.co.id, 18 October 2026 — £2 billion project figure, UK Power Networks named as the operator that set the early-to-mid-2030s timeline, original connection expected by end of 2026, site since cleared, on-site generation under investigation, 250 permanent jobs per earlier BBC reportingRead source
[4] Dealroom News, "Microsoft pulls out of Nscale's Loughton AI data centre as grid power slips to the 2030s", 18 October 2026 — corroboration of the Telegraph report's date and terms: cancellation, 2030s power expectation, only publicly announced customer, $35B listing ambition, Nscale commitment and alternative-power statementsRead source

THE ALFW VERDICT

Microsoft's reported withdrawal leaves Nscale's Loughton project without a publicly named anchor customer, while the site's reported grid-connection timetable extends well beyond its original 2027 opening target. Microsoft has not disclosed why it left, so the electricity delays stand as a major documented obstacle rather than a confirmed explanation — and without Microsoft's account, or a complete account of the project's economics, other factors cannot be ruled out. Nscale says its other contracts are unaffected and that it remains committed to the UK project. The broader lesson is the distinction between contracted value and deliverable capacity. Nscale's reported $103 billion-plus contracted total is commercially significant, but the aggregate does not show how much capacity is operating, when the remainder can be energised, or which contractual conditions affect delivery. Loughton illustrates that risk. It does not prove the same problem exists across Nscale's portfolio.