Microsoft pulls out of UK data centre deal with Nscale: Report

Microsoft has ended its collaboration with British cloud provider Nscale on a data center project in Loughton, Essex, according to a Telegraph report. The US tech giant was one of Nscale's two biggest customers, but it recently terminated its agreement without providing a reason. Microsoft did not respond to a Reuters request for comment.

Nscale had encountered numerous setbacks, with grid officials informing the company that reliable power supply for the data center was not expected until the 2030s. Despite the setback, Nscale maintains a strong relationship with Microsoft and is committed to the project and the UK. The company is exploring alternative power sources for the site and expanding its sites within the UK.

Nscale recently sought an initial public offering in the US, with Microsoft and Anthropic listed as major customers in its prospectus. The company offers infrastructure, including compute, power, and data centers, as well as software for training and running AI models. Nscale has experienced rapid growth since its launch, with its total contracted value increasing from $100 million to over $103 billion in just two-and-a-half years.