Microsoft pulls out of UK data center deal with Nscale, Telegraph reports

Microsoft has abandoned a data center agreement with British cloud provider Nscale, according to a report by Britain's Telegraph newspaper on Sunday. The US technology giant, which was one of Nscale's two biggest clients, recently ended its contract for the Loughton, Essex, facility. The newspaper did not reveal the reason behind Microsoft's withdrawal from the project.

Attempts to reach Microsoft and Nscale for comment were unsuccessful outside of regular business hours. Nscale had planned to launch an initial public offering in the US last month, with Microsoft and Anthropic set to be major investors, as per its prospectus. Nscale supplies infrastructure, such as compute, power, and data centers, along with software for training and operating AI models.

The Nvidia-backed AI company, which competes with CoreWeave, Nebius, Crusoe, and Lambda, has experienced rapid growth since its inception, with its total contracted value expanding from $100 million to over $103 billion in just two-and-a-half years.