Microsoft pulls out of AI datacentre project in Essex over power supply concerns

Microsoft has withdrawn as the anchor tenant from Nscale's planned AI data centre in Loughton, Essex, citing concerns about power availability. The UK government had promoted the project, announced in 2025, as the country's largest AI data centre, with an opening planned for next year. Losing Microsoft now puts that timetable and the facility's commercial case under pressure. For AI builders, the setback is another reminder that compute expansion is increasingly limited by electricity and grid connections, not just access to GPUs or capital. Large customers need confidence that new facilities can provide reliable, high-density power before committing workloads. For the UK, the episode also exposes the gap between announcing domestic AI capacity and delivering the energy infrastructure required to operate it.