Microsoft abandons UK AI supercomputer as grid struggles to keep up

Microsoft has reportedly pulled out of plans for Britain's largest AI supercomputer, because the government-backed project is facing the rather inconvenient problem of having no electricity to run it.

The tech giant has terminated its agreement with British AI infrastructure startup Nscale for a planned datacenter in Loughton, Essex, according to The Telegraph, which first reported the withdrawal on Sunday.

The decision follows reports that the site, which was supposed to begin operating in 2027, might not receive enough electricity from the grid until the early to mid-2030s.

Microsoft was expected to be the anchor customer at Loughton, which Nscale had pitched as the UK's largest sovereign AI datacenter.

Its departure leaves Nscale without a publicly announced customer for the site, although the neocloud insists the project is still going ahead.

When the deal was announced in September 2025, the plan was to pack 23,040 Nvidia GB300 GPUs into a 50MW facility, with room to expand to 90MW.

Microsoft would use the computing power for its Azure cloud services, with the first chips expected in early 2027.

One important detail remained: how to power it.

As The Guardian reported last month, UK Power Networks warned Nscale that the grid capacity needed might not be available until the 2030s.

A UK Power Networks spokesperson told The Register it could not discuss individual connections due to obligations under Section 105 of the Utilities Act.

"However, in general, many datacenters, whilst they can connect to our distribution network, are awaiting works on the national transmission network which we do not own," the spokesperson said.

Nscale, meanwhile, isn't letting the small matter of losing its biggest customer dampen its enthusiasm.

“We remain committed to both the Loughton project and the UK and we are exploring alternative power sources for the site, in addition to other expansion sites in the UK.

Our relationship with Microsoft remains strong and long-term, and this unfortunate London-wide grid issue has no impact on our other contracts,” Nscale told The Register.