The Loughton site loses its anchor customer as grid limits delay UK sovereign AI capacity
The Microsoft Essex data centre project lost its anchor on 18 October 2026 when Microsoft withdrew over power concerns. TF explains the power concerns and the risk to Nscale’s listing.
What’s Happening & Why It Matters
Microsoft Pulls Out
Microsoft has dropped plans to anchor the Loughton AI data centre, The Guardian reports. The Telegraph broke the news. The Windows maker was the expected main tenant of the site, which Nscale is developing.
Power supply concerns are the stated cause in the Guardian report. Microsoft stays involved in a separate Nscale project in Norway. Neither report gives a capacity, GPU count or investment figure for Loughton.
A Flagship Site Loses Its Anchor
Ministers promoted Loughton in 2025 as the largest sovereign AI data centre in the UK. The site targeted an opening in 2027. The Telegraph reports a stable grid connection might not arrive until the 2030s.
Grid access is the gate for AI data centres in the UK. A developer can win planning consent and a ministerial launch, then wait years for electricity. TF covered a similar strain on infrastructure in Data Centres Are War Targets in Ukraine, Russia and Iran.
The Listing Risk
Nscale is backed by Nvidia. Reports say the company could list in the US at a potential $35 billion (£26 billion, about €31 billion) valuation. Investors should read the figure as a company valuation, not a project cost.
Anthropic and Microsoft account for about 85% of Nscale’s contracts. Losing a major tenant at the flagship site raises questions for investors. TF reported Nvidia’s wider European plans in Nvidia Investing in Europe’s AI Future.
My take: Power, not politics, decided the outcome. The UK promised a sovereign AI site, and the grid could not supply electricity by the promised date. TF reviewed Microsoft’s call for AI oversight in Microsoft’s Nadella and Smith Call for an AI Emergency Brake. Government has to fix grid queues, or the next sovereign AI promise will go to another country.
TF Summary: What’s Next
Nscale needs a new anchor tenant or a new power source for Loughton. The company has to explain the exit to prospective IPO investors. Ministers have to say whether Loughton stays a flagship project. Other UK developers face the same grid queue.
MY FORECAST: Nscale will announce a new power plan or a replacement tenant for Loughton within six months. The IPO prospectus will list grid delays as a named risk. The government will announce grid reforms for AI data centres by mid-2027. Another large UK data centre project will report a delay.
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