Microsoft Reportedly Exits UK Nscale Data Center Deal as Grid Power Delays Hit 2030s

According to reports from Reuters and the Financial Times, Microsoft has reportedly terminated its data center agreement with UK cloud infrastructure provider Nscale for a site in Loughton, Essex. The facility was originally planned to house approximately 23,000 NVIDIA GB300 chips to support Azure cloud services, but grid operators informed Nscale that power supply would not be available until the 2030s. Microsoft declined to comment and did not explain the exact reasons for the termination.

The Financial Times cited sources familiar with the matter stating that Microsoft had intended to lease the full 50 MW capacity of the site, leaving Nscale to seek new tenants. Nscale told Reuters it remains committed to the Loughton project and is exploring alternative power sources and other expansion sites in the UK, noting that other contracts with Microsoft are unaffected. However, the company has not announced an alternative power solution or a new launch date.

This event underscores that the critical bottleneck for AI infrastructure expansion has shifted from 'acquiring chips' to 'physical grid interconnection.' Despite having capital and chip supply chains, major tech companies face multi-year or decade-long delays due to local grid upgrade cycles, queue times, and regulatory approvals. When power supply cannot meet expected timelines, even announced compute capacities face risks of delay or cancellation. For investors and industry observers, grid interconnection status has become a more urgent limiting factor than chip orders when assessing the feasibility of AI data center projects.