Microsoft Withdraws From UK’s Largest AI Data Center Project Amid Power Delays

Technology company Nscale says it remains committed to building a major artificial intelligence data center in Loughton, Essex, despite Microsoft’s reported withdrawal from the project and delays to its planned electricity supply, Alice Cunningham reported for BBC News.

Nscale plans to continue developing its £2 billion AI data center in Loughton, Essex, despite Microsoft's reported withdrawal and delays to the site's power supply. [Photo: Antire AS]

Nscale announced plans last year to invest £2 billion in the facility, which was expected to support advanced computing and AI workloads. Microsoft had been expected to fund a supercomputer at the site.

The BBC reported that Microsoft had terminated its involvement in the Loughton project.

Microsoft declined to comment publicly on the reported withdrawal.

Nscale said it was exploring alternative power sources and remained committed to the facility and its broader UK expansion plans.

“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,” an Nscale spokesperson said.

The company also said its relationship with Microsoft remained strong and long-term, noting that the two companies continued to work together on projects in Norway, Portugal and the United States.

The project has faced a major infrastructure challenge.

The data center was initially expected to receive its electricity supply by the end of 2026.

However, according to reports cited by the BBC, the site may not receive the required grid connection until the 2030s.

The delay has raised questions about the timeline for construction and operation, as large AI data centers require substantial and reliable supplies of electricity to power servers and cooling systems.

Despite the setback, Nscale has said it intends to continue with the Loughton development and is considering alternative power arrangements.

The facility is expected to create approximately 250 permanent jobs once operational, according to the company’s plans.

The eventual opening date will depend in part on resolving the electricity supply issue and finalizing the project’s financing and development arrangements.

Microsoft’s withdrawal from the Loughton project does not mean the company has ended its broader relationship with Nscale or abandoned its other UK AI investment plans.