Microsoft exits data centre deal in blow to UK AI ambitions
The US tech giant withdraws from a planned Loughton site with British start-up Nscale amid delays in securing access to the power grid.
Microsoft has announced that it has terminated its involvement in a UK AI data centre project with British start-up Nscale, casting a shadow over the nation's artificial intelligence aspirations. The US tech giant had previously agreed to lease computing capacity from Nscale, which is backed by chip manufacturer Nvidia, at a planned data centre in Loughton, northeast London.
Microsoft's decision appears to be site-specific, but the company maintains its commitment to the broader partnership with Nscale. The Loughton site was once touted as the largest UK sovereign AI data centre by former Prime Minister Keir Starmer. However, challenges such as high electricity prices and delays in connecting to the power grid have hindered the progress of several data centre projects in the UK.
Nscale spokesperson stated that they remain committed to the Loughton project and other expansion sites within the UK, exploring alternative power sources for the Loughton site. The power grid issue allegedly prevents Nscale from accessing electricity until the 2030s, according to UK media reports. Nscale is set to go public on the New York Stock Exchange, with an estimated valuation of up to $35 billion.
Microsoft's decision marks a setback for Nscale, which had relied on the Loughton deal for a significant portion of its committed revenue.
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