WORLDTECHMicrosoft drops Loughton data centre anchor deal with Nscale, clouding IPO
Microsoft has withdrawn from an arrangement to anchor a planned £2 billion data centre that Nscale was developing in Loughton, Essex, according to a report in The Telegraph, relayed by Crypto Briefing. The move comes as the British AI cloud startup readies a listing on the New York Stock Exchange.
Original plan and the reported reversal
Under the original plan, Microsoft would lease 23,000 Nvidia AI chips at the Loughton facility, which was designed to deliver about 90 MW and was slated to open in 2027. The Telegraph reported the termination, and Bloomberg, citing the paper, said the site had suffered a string of delays. The paper did not say why Microsoft stepped back.
Nscale says it remains committed to the Loughton project. According to research findings, UK Power Networks will be unable to supply sufficient power until the early to mid-2030s, and those findings describe the grid connection problems as severe.
Implications for the listing
Nscale is targeting a $35 billion valuation and aims to raise $3 billion, and its S-1 registration statement was filed on September 18, 2026. The company reports a contracted backlog of $103.4 billion, of which Microsoft accounts for approximately $43.8 billion.
Nscale currently operates about 55 MW of capacity in Europe against a far larger pipeline, which means most contracts behind that headline backlog are not yet live. Losing its anchor tenant at Loughton weighs on the listing case, and the outlet describes the timing as unfortunate.
Open questions
- Will Nscale find an alternative tenant or power source for the Loughton site?
- Will the cancellation change Nscale's planned listing or valuation?