Microsoft withdraws from Essex AI datacentre over power delays
Microsoft has withdrawn as the planned anchor customer for Nscale’s proposed AI datacentre in Loughton, Essex, after delays to the electricity connection threatened to postpone its operation for years. The decision puts the UK’s ambitions for a large sovereign AI computing facility in doubt, although Nscale says it remains committed to the project and is exploring other power sources.
Announced in September 2025, the 50MW site was designed to house 23,040 Nvidia GB300 GPUs, with scope to expand to 90MW; Microsoft had planned to use its computing capacity for Azure from 2027. UK Power Networks had warned that the required grid capacity might not be available until the 2030s, with some datacentre projects also waiting for national transmission upgrades. Across the UK, connection requests rose from 41GW to 125GW in under a year, and datacentres accounted for at least 80GW.
- Microsoft has left Nscale’s planned Essex AI datacentre.
- Grid capacity may not arrive until the 2030s.
- Nscale says it is pursuing alternative power sources.
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AI datacentres are large facilities filled with specialised computers that train and run artificial intelligence systems. The proposed Loughton site was planned by Nscale, with Microsoft set to use its computing capacity through its Azure cloud service.
These facilities need a dependable supply of electricity, and the UK’s power networks are facing heavy demand from new projects. The Loughton proposal was intended to provide substantial AI computing capacity in the UK, part of wider efforts to build domestic infrastructure for such services.
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The strongest fair case each way — we don't pick a winner.
The case for
The project could strengthen the UK’s access to advanced computing, support AI research and business, and reduce reliance on facilities abroad. Advocates may argue that finding alternative power sources and improving grid capacity are worthwhile investments if they help deliver reliable infrastructure and meet growing demand.
The case against
With grid capacity scarce and connection delays potentially lasting years, proceeding with a large, energy-intensive datacentre could compete with other users and leave expensive infrastructure underused. Critics may argue that public planning and investment should prioritise timely, dependable electricity for households and existing businesses, and that the project’s benefits do not yet justify its power demands.
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Originally published by The Register as “Microsoft abandons UK AI supercomputer as grid struggles to keep up”.