Microsoft cancels UK AI data center project due to power delays

The facility, developed by AI infrastructure company Nscale, was intended to supply computing power to Microsoft's Azure cloud business. Microsoft ended its anchor-tenant agreement on October 18, 2026, after UK Power Networks informed the project that adequate grid power would not reach the site until the early to mid-2030s. The data center was originally scheduled to open in late 2026 or early 2027.

Project details

The Loughton facility was positioned as the UK's largest sovereign AI data center, with an initial planned capacity of 50 MW, expandable to 90 MW. It was designed to house 23,040 Nvidia GB300 GPUs dedicated to Microsoft Azure workloads.

Broader implications

Microsoft emphasized that its wider partnership with Nscale remains strong, with contracts in Norway, Portugal, and the United States unaffected. However, Nscale's Norwegian flagship site is also facing delays, with only 6.4 MW of its planned 30 MW capacity currently operational.

The company said its wider partnership with Nscale remains strong.

UK grid challenges

The cancellation highlights the UK's grid connection backlog, which has reportedly caused delays of up to 13 years for some projects. This issue directly impacts the government's goal of establishing the UK as a leader in AI, ambitions previously showcased during US-UK tech diplomacy events in 2025.

Nscale's position

Nscale is exploring on-site generation options, including fuel cells, for the Loughton facility and continues pursuing UK expansion opportunities. The company, which filed for a US IPO in September 2026 targeting a $35 billion valuation, faces challenges demonstrating its ability to bring planned capacity online amid these power constraints.