Microsoft scraps UK data centre deal with Nscale, Telegraph says
The facility’s site has been contending with a series of delays, the newspaper adds
The British neocloud Nscale has ended a planned UK data centre deal with Microsoft, according to the Telegraph. The decision comes at a critical time for Nscale's initial public offering hopes. The newspaper did not specify the exact reason for Microsoft's withdrawal from the deal in Loughton, Essex. However, it was reported that the site has faced a series of delays.
Authorities have informed Nscale that they do not anticipate a power supply to the facility until the 2030s. Nscale's flagship site in Norway is also six months behind schedule, with only 6.4 megawatts (MW) of the planned 30 MW data centre currently operational. Nscale relies heavily on Microsoft and Anthropic for approximately 85% of its contracts, as per an IPO filing.
Microsoft's withdrawal would pose a setback for the company as it aims to raise up to US$3 billion in its upcoming IPO, which is scheduled for October. The tech giant is already grappling with investor caution over the risks associated with the expansion of artificial intelligence. Nscale, one of the prominent neoclouds, seeks to capitalize on the billions of dollars in AI investments pledged by major tech firms and plays a crucial role in the AI supply chain.
An Nscale spokesperson stated to the Telegraph that the company remains committed to both the Loughton project and the UK. They are exploring alternative power sources for the site and other expansion sites in the UK. They affirmed that their relationship with Microsoft remains strong and long-term, emphasizing that this issue does not affect their other contracts.
Microsoft did not provide any comment to the Telegraph, nor did they respond to requests for information from Bloomberg.
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