The Microsoft and Nscale logos. Image: Microsoft logo: Wikimedia Commons (public domain); Nscale logo: Nscale media kit
The machine Microsoft billed as Britain’s largest supercomputer has lost its main customer before a single chip was switched on. Microsoft has pulled out of its deal to be the anchor tenant at Nscale’s planned AI data centre in Loughton, Essex, the Telegraph reported on Sunday. Microsoft hasn’t commented, and the paper didn’t say why it walked away.
The timing is awkward for Nscale. The London-based company, which builds and rents out GPU clusters for AI, filed to list on the New York Stock Exchange last month and raised $3.36 billion ahead of a float that could value it at about $35 billion.
What Microsoft was meant to rent
Loughton was the centrepiece of the deals announced during Donald Trump’s state visit to Britain in September 2025. Nscale said at the time that the site would start at 50 megawatts, scale up to 90 megawatts and hold 23,040 of Nvidia’s GB300 chips, delivered in the first quarter of 2027, to run Microsoft’s Azure cloud services across the UK.
It hasn’t gone to plan. According to the Telegraph, the project has faced repeated delays, and grid officials don’t expect to supply power to the site until the 2030s. That is years after the chips were due to arrive, which may be all the explanation the deal needed.
Nscale says the relationship “remains strong”
Nscale told the Telegraph that its relationship with Microsoft “remains strong and long-term”, that it is still committed to Loughton and to the UK, and that it is looking at other ways to power the site. It said the electricity problems won’t affect its other contracts.
Those other contracts are much bigger than one Essex site. In its IPO filing, Nscale says that between September 2025 and April 2026 it signed agreements with Microsoft worth up to about $43.8 billion through December 2033, and that Anthropic agreed in August to pay it up to about $44.6 billion. In all, it counts $103.4 billion of contracted business, about 85% of it from those two customers.
The same filing warns investors about exactly this kind of problem. It lists “grid connection delays and capacity constraints” among the risks to its building plans, and says “certain of our other customer contracts provide the applicable customer with a right to terminate for delays”.
Second big name to leave Stargate UK
Microsoft isn’t the first partner to step back from Nscale’s British plans. The filing says OpenAI withdrew from Stargate UK, the wider platform launched alongside Loughton, in April 2026, and from its sister project Stargate Norway. Microsoft then took the spare capacity in Norway, a sign it still wants Nscale’s computing power, just not necessarily in Essex.
It also fits a broader wobble in AI infrastructure. Investors have grown nervous about the debt piling up behind new data centres: CoreWeave’s and Oracle’s bond yields hit record highs this month. Power has become as big a bottleneck as chips, which is why Microsoft, Google, Meta and Nvidia are now promising their sites will stop dropping off the grid. And Microsoft is preparing to run more of its AI on its own Maia 300 chip from 2027, the same year Loughton’s Nvidia chips were due.
Why it matters
Nscale is asking public investors to back a business built on a handful of huge contracts, and its biggest customer has just walked away from its flagship British site. Loughton was one of the headline projects of the state visit; a grid connection in the 2030s shows how far Britain’s power network lags behind its AI plans.
Sources: The Telegraph, Nscale S-1 filing (SEC), Nscale
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