Microsoft exits Nscale's Loughton AI supercomputer over grid delays

Microsoft has reportedly terminated its agreement with Nscale for the planned 50MW Loughton, Essex AI datacenter after UK Power Networks warned that grid capacity might not arrive until the early to mid-2030s. The site had been billed as Britain's largest sovereign AI supercomputer and was part of Microsoft's £22 billion UK investment pledge.

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Microsoft's exit removes the anchor customer from Nscale's flagship UK site and undermines the government's sovereign AI compute narrative. The cause is grid connection delays rather than demand, which shows that power access is now the binding constraint on AI buildouts. The planned 23,040 Nvidia GB300 GPU deployment is delayed, deferring a block of UK GPU demand. Developers are likely to pursue on-site gas generation or other power sources and to favor locations with secured grid capacity. UK connection queue demand has surged from 41GW to 125GW, so other projects face similar risk and Ofgem's connection reforms matter more.