What happened
Microsoft has terminated its agreement for a data centre at Loughton in Essex, Britain’s Telegraph reported on Sunday. Reuters picked up the report on 18 October, describing Microsoft as one of two largest customers of Nscale, the British cloud provider that was building the site.
The Telegraph did not say why Microsoft withdrew. Reuters said neither Microsoft nor Nscale responded to requests for comment outside business hours.
The building was not a small one. Reports of the Telegraph’s story put it at 23,040 Nvidia GB300 GPUs for Microsoft Azure, with 50MW of initial capacity designed to scale to 90MW, and the chips expected in the first quarter of 2027. Microsoft was the only announced customer for that site, which means the project is now without one.
The power problem
The reason being pointed at is electricity. The Telegraph reported that grid officials had told Nscale the site might not get a connection until sometime in the 2030s. Neither company has confirmed that the grid delay caused the withdrawal, and that distinction matters: a tenant leaving a site that cannot be powered is a different story from a tenant leaving a site it no longer wants.
Nscale told Reuters that its relationship with Microsoft remains strong and long-term, that the London-wide grid issue does not affect its other contracts, and that it stays committed to Loughton and its other UK sites while it looks at alternative power sources.
That framing is plausible on the face of it. Nscale’s contracted business with Microsoft extends well beyond one building, and a single site losing its anchor does not cancel the rest.
Why the timing hurts
Nscale filed a preliminary prospectus for a US listing last month. Reuters notes that the filing expected Microsoft and Anthropic to be major customers, and that Nscale’s total contracted value has grown from $100m to more than $103bn in roughly two and a half years. The company is backed by Nvidia and competes with CoreWeave, Nebius, Crusoe and Lambda.
A contracted backlog is the central number in a neocloud’s pitch to public investors, because it is the thing that converts capital expenditure into revenue. A reported cancellation by the largest name on that list, days or weeks before a roadshow, is the kind of item that gets asked about in every meeting — not because it is necessarily large against $103bn, but because it raises the question of how much of a backlog is contingent on power that does not exist yet.
What to watch
Three things. Whether either company confirms on the record what was cancelled and why. Whether Nscale’s prospectus is amended to reflect it. And whether an electricity connection in the London area, which is the constraint being described here, turns out to affect any of the other UK sites Nscale says are unaffected.
