Microsoft pulls out of a UK AI data center deal

Corrected 19 Oct: Microsoft gave no reason. 'No grid power until the 2030s' is the Telegraph's report. All corrections

Microsoft has reportedly backed out of a plan to be the main customer at a big AI data center in Essex, England. The site belongs to Nscale, a British AI cloud company. Reports point to a long wait for electricity from the power grid.

What happened

The Telegraph reported on October 18, 2026 that Microsoft had planned to be the anchor tenant, renting about 23,000 Nvidia AI chips at Nscale's Essex site. That is according to a Techmeme summary of the coverage. The summary says the Telegraph tied the exit to delays, and that the site may not get grid power until the 2030s. The Telegraph page itself could not be opened for this story.

Implicator.ai reports that Microsoft withdrew from the planned data center in Loughton, Essex. It says Microsoft has not explained why or commented. It also says the end date, the value of the project and the terms of the cancellation are not public.

Nscale says the problem is a grid issue across London. It says its relationship with Microsoft is still strong and long-term, and that its other Microsoft contracts are not affected, per Implicator.ai.

Key facts

• Chips in the deal: about 23,000 Nvidia AI chips, per the Telegraph as summarized by Techmeme.
• Original plan: announced in September 2025 with 23,040 Nvidia GB300 chips, delivery aimed at the first quarter of 2027, and 50 megawatts of starting power, per Implicator.ai.
• Grid wait: the report says the local power network indicated in September that enough electricity would not be there until the early to mid-2030s. The network did not discuss this project directly.
• Other Microsoft deals: Implicator.ai says Microsoft agreements signed between September 2025 and April 2026 provide up to $43.8 billion through December 2033.
• Stock plans: Nscale filed publicly on September 18 for a stock listing, per Implicator.ai.

Background

Nscale is building AI data centers, which are buildings full of chips that run AI. Implicator.ai says its last funding round, in March 2026, valued it at $14.6 billion. The same report says it is reportedly aiming for about $30 billion in its listing, while some investors suggest $16 billion to $19 billion. No final decision has been made.

The Techmeme summary also points to Bloomberg coverage of that investor pushback, alongside the Microsoft news. Implicator.ai says Nscale reported $103.4 billion in active and contracted value at August 31, 2026, but only $2.6 billion of that was active.

What it means for you

Everyday users will not see a change in their apps. But AI tools need huge buildings, chips and power. If a country cannot supply the power, big projects can stall or move.

Our take: this shows that electricity, not just chips, can decide where AI is built. A company can have money and chips and still wait years for a grid connection.

Remember, Microsoft has not commented, and the main report comes from the Telegraph. Treat the reason as reported, not confirmed by Microsoft.

What happens next

Implicator.ai says Nscale is looking at on-site power generation and ways to speed up its grid connection. It says there is no new timetable. It also says no final IPO price has been set and Microsoft's next earnings release is October 28.

Our take: watch for a new customer at the Essex site, and for any change to Nscale's listing plans.

FAQ

Did Microsoft cancel its Nscale deal?

It reportedly pulled out of the Essex site, per Techmeme and Implicator.ai. Microsoft has not commented.

Does this affect Nscale's other Microsoft deals?

Nscale says no. It says its other Microsoft contracts are unaffected.

Why did Microsoft leave?

Microsoft has not said. Reports point to a long wait for grid power at the site.

Sources

• techmeme.com
• implicator.ai