Microsoft abandons UK AI supercomputer as grid struggles to keep up

What happened

Microsoft has ended its deal with Nscale, a British startup that builds AI data centers. The data center was planned for Loughton, Essex, and was meant to be the UK's largest sovereign AI data center. Nscale says the project is still going ahead, but it no longer has a named customer for the site.

Key facts

• The original plan, announced in September 2025, was to fit 23,040 Nvidia GB300 chips into a 50MW facility, with room to grow to 90MW.
• The site was supposed to start running in 2027.
• The grid may not have enough power for the site until the early to mid-2030s.
• Demand for new grid connections in the UK rose from 41GW to 125GW in less than a year. Data centers make up at least 80GW of that.

Why power is the problem

A data center is a building full of computers that need huge amounts of electricity to run. Before a site can use that power, it must connect to the national grid. The UK Power Networks company said many data centers are waiting for work on the national transmission network, which it does not own. This is a delay that companies cannot fix on their own.

Why it matters

The UK wants to be a leader in AI, and this project was part of a large Microsoft investment in the country. Losing the anchor customer and facing years of delay shows that power supply may slow down the UK's AI plans. Some builders are now looking at gas power instead of waiting for the grid, and others face local opposition.

What to watch

• Whether Nscale finds a new customer or new power source for Loughton.
• How Ofgem's proposed charge on data center connection requests is decided.
• Whether other UK data center projects also face grid delays or are dropped.