Microsoft exits planned Loughton AI datacentre amid power concerns
Microsoft has withdrawn from Nscale’s planned AI datacentre in Loughton, Essex, citing concerns about power supplies. The move removes the project’s expected anchor tenant and adds to doubts about a development promoted by the government as central to the UK’s AI ambitions.
The facility was announced in 2025 as the country’s largest sovereign AI datacentre and was due to open next year. A month earlier, it emerged that electricity supply problems could delay it; the site was also reported to still be an operational scaffolding yard. Microsoft was the only publicly announced customer for the Essex project, though it remains involved in a separate Nscale project in Norway. Nscale says it is committed to Loughton and is exploring other power sources.
- Microsoft has left Nscale’s planned Essex AI datacentre.
- Power supply problems could delay the project.
- Nscale says it remains committed and is seeking alternatives.
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AI datacentres are large facilities that house powerful computers used to develop and run artificial intelligence services. They need reliable electricity to operate, and demand for power can make it difficult to build or expand them.
Nscale is the company developing the proposed Loughton site in Essex, which was presented as a UK facility for AI computing. Microsoft had been named as its customer; the two companies are also involved in a separate project in Norway. Datacentres are part of plans to expand the UK’s computing capacity, so the Loughton project has drawn attention as one test of whether those plans can be delivered.
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The case for
Leaving the project may be a responsible response if reliable power cannot be secured: a large AI datacentre could put pressure on electricity supplies and delay delivery, and an anchor tenant should not commit before those risks are resolved. Microsoft’s withdrawal could also prompt a more realistic assessment of the project’s readiness and encourage Nscale to find a workable power solution.
The case against
The withdrawal removes the project’s only publicly announced customer and may weaken a development presented as important to the UK’s AI ambitions. If the power difficulties can be addressed, continuing with the project could support domestic AI infrastructure and investment; Microsoft’s decision may therefore leave Nscale and the government with a harder task in attracting customers and backing.
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Originally published by The Guardian as “Microsoft drops huge AI datacentre project in Essex over power supply concerns”.