Microsoft exits Nscale's UK site weeks before $35B IPO push
What's the deal? Microsoft has pulled out of its role as anchor tenant at Nscale's flagship UK data centre in Loughton, Essex, just as the British neocloud chases a New York Stock Exchange listing that could value it at up to $35 billion. The site was set to house 23,040 Nvidia GB300 GPUs for Microsoft Azure, with delivery planned for the first quarter of 2027.
Why now? The withdrawal comes weeks after Nscale filed to list under the ticker NSCL, citing a $103.4 billion contracted revenue backlog as its headline pitch. The Telegraph did not report Microsoft's reason, but the practical cause looks mundane: UK Power NetworksDealroom has a profile for this one. Try Dealroom → has told Nscale the site may not get a grid connection until the 2030s.
The stakes: Microsoft and Anthropic together account for roughly 85% of Nscale's contract value, per the company's IPO filing. Microsoft alone has signed statements of work worth up to $43.8 billion through December 2033, though the filing does not show how much, if any, was tied to Loughton.
What's the context? The Loughton project had been held up as part of Microsoft's £22 billion UK infrastructure pledge, announced during President Trump's state visit. Nscale's other flagship site in Glomfjord, Norway, is also six months behind schedule, with only 6.4MW of an intended 30MW running.
The expansion angle: Nscale said it remains committed to the site and the wider UK market. "We remain committed to both the Loughton project and the UK and we are exploring alternative power sources for the site, in addition to other expansion sites in the UK," a spokesperson said, adding that the grid issue "has no impact on our other projects."
What could go wrong? Losing its sole announced UK customer sharpens questions about customer concentration and whether Nscale can deliver its headline backlog. The company's wider commitments depend on facilities being completed and put into service — never guaranteed when power is the bottleneck.
The signal: The exit lands as investors turn selective on AI-infrastructure bets — Nvidia-backed Firmus shelved its IPO in October amid weak demand, and other sector fundraisings were paused during an AI stock sell-off. Nscale's setback shows the UK's AI ambitions are running into power availability and grid timelines, not just financing. "Billions of pounds lost on a single project because we can't connect it to the grid for half a decade," commentator Sam Bowman wrote on X.
Read more: Bloomberg · The Telegraph
