Power delays prompt Microsoft to withdraw from 50-megawatt computing site
Key Facts
Microsoft has withdrawn from an agreement to be the anchor tenant at a data center Nscale is developing in Loughton, Essex, after electricity network officials told the developer they do not expect to supply the site with power until the 2030s. Microsoft said the decision concerns one site, indicating that the withdrawal applies to the specific facility and does not change its stated position on its partnership with Nscale. The site was scheduled to begin operations early the year after the Reuters report published on October 19, 2026. It was planned to house 23,040 Nvidia GB300 processors and provide 50 megawatts of AI computing capacity for Azure services in Britain. The expected power connection date makes the gap between the planned operating schedule and the facility’s ability to run the decisive factor in the agreement’s future.
The project was part of a plan to build substantial computing capacity in the United Kingdom, and Microsoft described it as set to house the country’s largest AI supercomputer. The company said the facility would operate with more than 23,000 Nvidia GPUs in partnership with Nscale. The announced figures confirm that the site was designed to provide dedicated computing capacity for Azure services, rather than simply add to the data center portfolio. But the connection delay puts the launch date for that capacity in doubt, although the company has not announced a withdrawal from the broader partnership. Its British investment plan included $15 billion in capital spending on cloud and AI infrastructure, as well as $15 billion in operating expenditure. The site decision comes amid an announced expansion, while underscoring that execution depends on power being available at the right place and time.
The Loughton setback is part of broader pressure on the British grid’s ability to accommodate data center projects. A Reuters report said grid connection queue bottlenecks could delay data center projects by as much as 13 years. In March 2026, the British government said a surge in connection applications had contributed to waits of up to 15 years for some projects, and announced it would prioritize strategic projects, including AI data centers. Applications to connect to the transmission grid also rose from 41 to 125 gigawatts between November 2024 and June 2025, with Ofgem attributing most of the increase to data center projects. The figures show the scale of demand for grid connections as the government seeks to accelerate digital infrastructure, while actual timelines for power connections remain a constraint on development schedules.
Britain is seeking to increase available computing capacity while addressing grid bottlenecks. The UK’s compute roadmap projects that the country will need at least 6 gigawatts of AI-qualified data center capacity by 2030, three times the capacity currently available. The government aims to establish a group of nationally significant sites, each able to meet demand of at least 500 megawatts by 2030, with at least one growth zone expanding to more than a gigawatt. By comparison, data centers in Great Britain consumed 4.5 terawatt-hours in 2024, or 2% of the grid’s total consumption of 249.2 terawatt-hours. Their consumption increased by 1.3 terawatt-hours, equivalent to 41%, between 2020 and 2024. The figures put future computing needs up against the challenge of securing and connecting electricity capacity on timelines that keep pace with demand growth.
Regulators are considering measures to curb connection applications that reserve grid capacity without making rapid progress toward operation. Ofgem proposed a fee on large data center projects ranging from £237,500 to £712,500 per megawatt. Under the proposal, the fee would be refunded when a project reaches the stage of drawing power, and forfeited if it leaves the queue early. The measure aims to free grid capacity for serious projects, the regulator said, amid a sharp rise in connection applications. In Loughton, Nscale said it remained committed to the project and to Britain, and was exploring alternative power sources for the site and other locations for expansion in the United Kingdom. Microsoft said it remained committed to its partnership with Nscale and to building digital infrastructure and supporting AI growth worldwide; the two companies did not set a new date for the Loughton site to begin operations.