Microsoft backs away from Nscale’s Loughton AI data center plan amid UK power grid delay, report says

Microsoft has reportedly dropped plans to be the sole announced customer for Nscale’s proposed AI data center in Loughton, Essex, after the project encountered a long interconnection delay for electricity supply, according to a report carried by Yahoo Finance.

The dispute centers on when the site could draw sufficient power from the local grid. The report says UK Power Networks told Nscale that the Essex location would not receive enough power until the early to mid-2030s, pushing the project outside the timeframe needed for an AI load.

Microsoft was described in the report as the only customer publicly announced for the 50-megawatt (MW) Loughton project. A data center’s “MW” rating is a measure of the site’s peak electrical capacity, which typically determines how large an AI and cloud workload it can support.

The report frames Microsoft’s move as a response to the fact that the power constraint would delay when the site could come online and begin supporting customers’ computing needs. It does not, in the available account, describe an alternative site or a revised timetable in the UK.

For Microsoft, the timing of power availability can be as critical as land and construction. AI deployments require sustained electricity, and data centers depend on grid upgrades that can take years, particularly when demand forecasts outrun existing capacity.

The broader sector context is that many AI-focused data center projects in the UK and Europe have faced “queue” and upgrade bottlenecks, especially where high-voltage lines, substations, and transformer capacity must be expanded before large loads can be connected. That dynamic can force developers and anchor customers to renegotiate schedules or re-scope projects before concrete milestones are reached.

What remains unclear from the report is the scope of the fallout between the parties, including whether Microsoft withdrew entirely or whether the decision is tied specifically to the interconnection window rather than the underlying demand outlook. The account also does not specify what, if any, terms Microsoft and Nscale agreed on regarding delays or customer commitments.

Going forward, the key question for the Loughton plan is whether Nscale can secure a faster path to power, attract replacement customers willing to wait for the early-to-mid 2030s connection timeline, or restructure the project to align with the grid’s upgrade schedule.