Microsoft has reportedly withdrawn from its planned involvement in Nscale’s Loughton, Essex, artificial-intelligence data centre, according to Reuters and the BBC. The reported change affects a project already facing a major electricity-connection delay, but it does not establish that the site has been cancelled: Nscale says it remains committed to Loughton and is looking at alternative power sources.
Microsoft reportedly withdraws from Nscale’s planned UK AI data-centre deal
What Reuters and the BBC reported
On 18 October 2026, Reuters reported that Microsoft had pulled out of a data-centre deal with British cloud provider Nscale. Reuters attributed the initial account to the Telegraph, which reported that Microsoft had recently terminated its agreement for the Loughton site in Essex. The BBC separately reported that Microsoft had terminated its involvement in the project. Those reports are the basis for the withdrawal story; there is no public Microsoft confirmation in the material reviewed here.
Microsoft declined a request for comment from Reuters, and the BBC also reported that the company declined to comment. That silence matters because it leaves the precise contractual change, its timing and the reason for it unconfirmed by Microsoft itself. The Telegraph account, as relayed by Reuters and the BBC, did not specify why Microsoft withdrew. It is therefore more accurate to describe this as a reported termination of Microsoft’s involvement than as a fully explained corporate decision.
Nscale’s position, as quoted by both news organisations, is different from a project-ending announcement. The company said it remains committed to the Loughton project and the UK, while exploring alternative power sources for the site and other UK expansion locations. Nscale also said its relationship with Microsoft remains strong and long-term, and that the London-wide grid problem has no impact on its other contracts. That is a company response, not independent confirmation that the Loughton plan will be delivered on its original terms.
The distinction is important. “Withdrawn,” “terminated,” “delayed” and “cancelled” are not interchangeable descriptions. Reuters and the BBC reported a withdrawal from the Microsoft arrangement; neither source established that Nscale had cancelled the facility itself. Until the parties disclose more, the status of the site, any replacement customer or funding arrangement, and the commercial consequences remain open questions.
The original Loughton plan
Nscale announced its UK expansion on 13 January 2025 in a company press release. The release described a planned investment of $2.5 billion in the UK data-centre industry over three years. Public coverage has also described the Loughton project as a £2 billion facility, so the dollar and sterling figures should not be treated as a single, precisely comparable project price without further explanation. The announcement covered a broader UK programme as well as the first site.
For Loughton, Nscale said it had purchased a site capable of supporting 50 megawatts of AI and high-performance-computing capacity, with the power allocation able to scale to 90MW. The company said the facility would use liquid cooling for generative-AI GPU deployments and was scheduled to go live in the fourth quarter of 2026. Those are announced specifications and a planned schedule, not evidence that the site reached operation.
Nscale’s release also said the site could house up to 45,000 Nvidia GB200 GPUs. That figure should remain attributed to Nscale. The BBC’s later reporting describes a different scale in the project’s evolving public account, and the research record notes a later figure of 23,040 GPUs. Because the numbers come from different stages or descriptions of the plan, they should not be combined into a definitive installed capacity. The safe conclusion is that the proposal was designed as a large AI-compute facility, while its final configuration remains unsettled.
The proposed economic benefits were also framed as forecasts. Nscale said construction would create 500 jobs and that a further 250 roles would support running and operating the facility over three years. In its October report, the BBC described 250 permanent jobs when the site eventually opens. These statements concern anticipated employment, not jobs already created. They also depend on construction, power availability and the project proceeding in a form close to the announced design.
Why the power connection matters
The immediate obstacle described by the independent reports is not simply a customer decision. The Loughton project was expected to receive its electricity supply at the end of 2026, according to the BBC’s account of the plan. The BBC said Nscale had instead been told the connection would not arrive until the 2030s. Reuters likewise reported, citing the Telegraph, that National Grid officials did not expect to provide a power supply until the 2030s.
For an AI data centre, that is a fundamental constraint rather than a minor scheduling inconvenience. The facility’s computing equipment, cooling systems and networking architecture all depend on a dependable high-capacity energy connection. A delay measured in years can affect equipment procurement, customer commitments, financing, construction sequencing and the point at which revenue can begin. It can also change what hardware is economical by the time the site is energised, because AI accelerators and data-centre designs continue to evolve.
Nscale has proposed looking for alternative power sources rather than abandoning the location. The company did not, in the sources reviewed, publish a completed replacement-power contract, a new energisation date or a revised technical design. “Exploring” is therefore a planned action, not proof that an alternative is secured. It is also unclear whether an alternative could reproduce the original 50MW-to-90MW ambition, meet the same cost and reliability requirements, or preserve the publicised launch schedule.
The grid problem gives context to the reported Microsoft withdrawal without proving causation. The reports say the project has faced repeated delays and that the power timetable moved into the 2030s; they do not establish that the delay was the sole reason Microsoft terminated its arrangement. A careful account should keep those two facts separate: a serious infrastructure delay was reported, and a customer relationship was separately reported to have changed.
What the reported withdrawal could change
Microsoft was not described as an incidental participant. The BBC said Microsoft was to fund a supercomputer at the site and noted that, only the previous month, Microsoft had announced that part of its $30 billion UK investment would fund the Loughton supercomputer. Reuters described Microsoft as one of Nscale’s two largest customers and said Nscale’s US initial-public-offering prospectus expected Microsoft and Anthropic to be major customers. These details indicate why the reported decision could matter beyond one building, although they do not reveal the value or terms of the Loughton agreement.
If the arrangement has ended, Nscale may need to find another customer, capital source or deployment plan for some of the site’s planned capacity. It may also need to renegotiate procurement and construction decisions made for Microsoft’s expected workload. None of those consequences has been announced in the sources reviewed. They are possible business implications, not reported outcomes.
The effect on Microsoft is equally unclear. The BBC reported that the companies are still working together on projects in Norway, Portugal and the United States. Nscale’s statement that the wider relationship remains strong supports the distinction between one site and all dealings between the companies. It would be wrong to turn the Loughton report into a claim that Microsoft has ended its relationship with Nscale globally.
The episode also illustrates the difference between demand for AI computing and the ability to build it. A major cloud or technology company can plan a large workload, but the physical site still requires land, electrical capacity, cooling, construction and approvals. In Loughton, the reported grid timetable became the central practical question. A customer’s withdrawal may be commercially significant, yet a secured power connection would still be necessary before the original plan could operate.
What happens next
The next meaningful evidence would be a direct statement from Microsoft explaining whether it ended a contract, reduced a commitment or changed the intended Loughton deployment. Nscale could also clarify whether the site remains the same 50MW-to-90MW project, whether another customer is being sought, and what alternative power means in practice. Until then, the Reuters and BBC reports should be read as an account of a reported withdrawal, not a final project post-mortem.
The company’s January 2025 announcement set an ambitious Q4 2026 target, while the later reporting points to a possible grid connection in the 2030s. Those dates cannot be reconciled into a single current launch date. The original target is best treated as an earlier plan, and the 2030s timing as the reported grid outlook—not as proof that the data centre will open then.
For now, the most defensible summary is narrow: Reuters and the BBC reported that Microsoft has withdrawn from its planned Loughton involvement; Microsoft has not publicly explained the decision in the sources reviewed; Nscale says the project and its UK ambitions continue; and the site faces a serious, separately reported power delay. Whether those pieces can be resolved into a working data centre remains uncertain.
FAQs
Has Microsoft officially confirmed it cancelled the Loughton project?
No. Reuters and the BBC reported that Microsoft terminated or pulled out of its involvement, with Reuters attributing the initial report to the Telegraph. Microsoft declined to comment. The reports do not establish that the Loughton facility itself has been cancelled.
What is Nscale saying?
Nscale says it remains committed to the Loughton project and the UK, is exploring alternative power sources, and continues to have a strong, long-term relationship with Microsoft on other work. Those are Nscale’s statements about its plans and relationship.
Why has the project been delayed?
The BBC and Reuters, citing the reported Telegraph account, said the electricity connection may not be available until the 2030s rather than at the earlier expected point. The sources do not prove that this delay caused Microsoft’s reported withdrawal.
How large was the proposed data centre?
Nscale’s January 2025 announcement described 50MW of capacity scalable to 90MW and up to 45,000 GB200 GPUs. The BBC has reported the project as a £2bn centre and 250 eventual permanent jobs. These are attributed plans, and the public figures have changed or differ by source.