Microsoft Nscale data centre plans at Loughton in Essex lost their anchor tenant on 19 October 2026, when Microsoft ended its agreement for the site. The 50-megawatt facility was to run 23,040 Nvidia GB300 chips for Azure from early 2027. Grid power may not arrive until the 2030s.
What Microsoft Ended
Microsoft terminated only the Loughton agreement, and both companies say the wider relationship survives.
“This decision relates to a single site,” a Microsoft spokesperson said, adding that the company remains committed to its partnership with Nscale. Nscale’s spokesperson said the relationship “remains strong and long-term” and that “this unfortunate London-wide grid issue has no impact on our other contracts”.
The Telegraph first reported the withdrawal, and Reuters, the BBC and others followed on 19 October 2026. Neither company has published the contractual terms of the termination, and no penalty or break payment has been disclosed.
The Loughton Project as Planned
The site was announced in September 2025, during a run of technology commitments made around a US presidential visit to Britain, and ministers promoted it as the country’s largest sovereign AI facility.
| Specification | Detail |
|---|---|
| Location | Loughton, Essex, England |
| Initial capacity | 50 megawatts |
| Expansion capacity | Up to 90 megawatts |
| Hardware | 23,040 Nvidia GB300 GPUs |
| Purpose | Microsoft Azure AI services in the UK |
| Target for first chips | First quarter of 2027 |
| Announced | September 2025 |
The Guardian reported in September 2026 that the 2027 opening would be missed, and that the former scaffolding yard chosen for the site had already been cleared.
Why the Power Is Not Coming
The obstacle is not the local connection. It is the national transmission network sitting behind it, and the distinction explains why no amount of local work would have fixed this.
Britain’s electricity system splits responsibility between two layers. Distribution network operators own the regional wires that connect individual customers. The high-voltage transmission network that carries bulk power across the country is owned separately. Loughton sits in the area served by UK Power Networks, the distribution operator for London, the South East and the East of England.
UK Power Networks told reporters that data centres in its region can connect to its distribution network but “are awaiting works on the wider national electricity transmission network before they can begin operation” — infrastructure it does not own. In other words, the wires to the building were not the problem; the capacity to feed them was.
According to The Telegraph, UK Power Networks indicated sufficient capacity for the site would not be available until the early to mid-2030s. The Guardian put the timing more loosely at some point in the 2030s. That is a delay of roughly six to nine years against a first-quarter 2027 target, which is why an anchor tenant with a product roadmap could not wait.
How Big the UK Grid Queue Has Become
Loughton is not an isolated case, and the regulator’s own figures show why.
Ofgem, the Great Britain energy regulator, reported that contracted demand connection offers rose from 41GW to 125GW between November 2024 and June 2025, growth it attributes largely to data centres. Ofgem says data centre projects account for at least 80GW of that queue.
Eleanor Warburton, Ofgem’s Director for Energy System Design and Development, said Britain’s demand connections queue “has more than tripled in size in less than a year”, and that “where speculative projects take up space in the queue, they can delay other schemes”.
Ofgem’s concern is that many queued projects will never be built while holding capacity that working projects need. On 29 July 2026 it opened a consultation proposing a Data Centre Commitment Fee of between £237,500 and £712,500 per megawatt, which it estimates at 2.5% to 7.5% of average project costs, plus data-centre-specific queue milestones. That consultation closed on 16 September 2026, and Ofgem has said it will publish decisions later in 2026.
Reuters notes that grid connection queues can delay data centre projects by as much as 13 years. Capacity constraints of this kind are now shaping where compute gets built, and have pushed operators toward unusual alternatives, including Google’s Project Suncatcher test of AI chips in orbit.
What Nscale Says Happens Next
Nscale has not abandoned the site, but it has not published a revised timetable either.
The company said it “remains committed to both the Loughton project and the UK” and that it is “exploring alternative power sources for the site”, alongside other UK expansion locations. The Guardian reported that this includes examining on-site generation and whether the interconnection process can be accelerated.
On-site generation would mean producing electricity at the site rather than drawing it from the grid, typically with gas turbines, fuel cells or batteries. For a 50-megawatt load running continuously, that is a substantial power station in its own right, and Nscale has not said what technology it is considering, what it would cost, or whether planning consent exists for it.
Loughton currently has no publicly announced customer. Delays of this kind have reshaped other operators’ commitments too, including an Oracle force majeure notice that could push data centre rent back three years, while rivals such as Crusoe report a gigawatt already running.
What Has Not Been Said
As of 20 October 2026, the project has no revised opening date, no replacement anchor tenant and no confirmed power solution.
- The contract: Neither company has disclosed the terminated agreement’s value, duration or exit terms.
- The grid operator’s position: UK Power Networks declined to discuss the specific project and pointed to the transmission network instead. It has not published a connection date for the site.
- The exact timeline: The early-to-mid-2030s figure comes via The Telegraph, with Morning Intelligence first reporting that timeline. The Guardian says only “the 2030s”. Neither company has confirmed a year on the record.
- Microsoft’s UK plans: Loughton formed part of a $30 billion UK commitment Microsoft announced for 2025 to 2028, of which $15 billion was capital spending. Microsoft has not said whether that capacity moves to another site.
- Government response: No minister had commented publicly on the withdrawal at the time of reporting.
Frequently Asked Questions
Why Did Microsoft Leave the Nscale Data Centre Project?
Because the site could not get enough electricity in time. Grid capacity for Loughton is not expected until the early to mid-2030s, against a target of running chips from the first quarter of 2027.
Is the Loughton Data Centre Cancelled?
No. Nscale says it remains committed to the site and is looking at alternative power sources, but it has given no new opening date and the site has no announced customer.
Who Is Responsible for the Delay?
No single operator. UK Power Networks can connect the site to its regional distribution network, but the project is waiting on upgrades to the national transmission network, which UK Power Networks does not own.
How Long Is the UK Grid Connection Queue?
Ofgem reported contracted demand offers rising from 41GW to 125GW between November 2024 and June 2025, with data centres accounting for at least 80GW. Reuters reports waits can reach 13 years.
Does This Affect Microsoft’s Other Work With Nscale?
Both companies say no. Microsoft said the decision relates to a single site, and Nscale said the grid issue has no impact on its other contracts.
