Microsoft has terminated its agreement to take capacity at Nscale's planned AI data center in Loughton, Essex, after delays to the site's grid connection, according to reports published Oct. 18–19, 2026. The Telegraph first reported the decision. According to Data Center Knowledge, an Nscale spokesperson confirmed the termination.
The news came one month after Nscale filed for a U.S. initial public offering. In that filing, the company disclosed Microsoft statements of work worth up to approximately $43.8 billion through December 2033. The registration statement does not mention Loughton.
What Was Planned at Loughton
The Register reported that the Loughton deal was announced in September 2025 as a 50 MW facility that could expand to 90 MW. It was to house 23,040 Nvidia GB300 GPUs, with the first chips expected in early 2027. Data Center Knowledge gave the same MW and GPU figures for the project, which it said Nscale announced in 2025, and said the GPUs were planned for Microsoft Azure.
The Register reported that the site was supposed to begin operating in 2027 but might not receive enough electricity from the grid until the early to mid-2030s. A Reuters report carried by BusinessDay said, citing The Telegraph, that national power grid officials had told Nscale they did not expect a power supply for the data center until the 2030s.
The Grid Question
UK Power Networks, the distribution network operator cited by The Register, would not discuss the site. The Register reported that a UK Power Networks spokesperson said it could not discuss individual connections because of obligations under Section 105 of the Utilities Act. The spokesperson said many data centers can connect to its distribution network but are awaiting works on the national transmission network, which UK Power Networks does not own.
Nscale's spokesperson called it an "unfortunate London-wide grid issue," according to Reuters and The Register. None of the reports reviewed gives a revised energization date for the site.
What Each Company Has Said
According to Reuters, the Nscale spokesperson said the company's relationship with Microsoft remains strong and long-term, and that the grid issue has no impact on its other contracts. The spokesperson said Nscale is still committed to Loughton and to the UK and is exploring alternative power sources for the site, in addition to other expansion sites in the UK. Data Center Knowledge reported the same position. It said Nscale described the termination as not affecting its other contracts with Microsoft. The Register reported that Nscale insists the project is still going ahead. Microsoft did not respond to The Register's request for comment.
Reuters described Microsoft as one of Nscale's two largest customers. None of the reports reviewed for this article named a replacement tenant for Loughton or a specific alternative power arrangement. The Register said the departure leaves Nscale without a publicly announced customer for the site.
What the IPO Filing Shows
Nscale's Form S-1, filed with the Securities and Exchange Commission on Sept. 18, 2026, shows how much of the company's disclosed business depends on two customers. Its key disclosures:
- Microsoft: Between September 2025 and April 2026, Nscale entered statements of work with Microsoft for payments of up to approximately $43.8 billion through December 2033. That figure excludes optional extensions and is subject to delivery and availability-of-service requirements.
- Anthropic: On Aug. 25, 2026, Nscale entered services agreements with Anthropic for aggregate payments of up to approximately $44.6 billion, for GPU infrastructure at its Monarch Compute Campus.
- Portugal: The filing describes a 200 MW owned hyperscale campus in Portugal, at the SINES Data Campus. It says the project will support the expansion of Nscale's collaboration with Microsoft through more than 66,000 Nvidia Vera Rubin NVL72 GPUs, starting in late 2027.
- Customer concentration: A risk factor warns that negative changes in demand from Microsoft, Anthropic or other key customers would adversely affect the business.
Loughton does not appear in the S-1. The filing therefore gives no basis for saying whether the Loughton capacity was counted in the $43.8 billion Microsoft figure. Nscale's statement that its other contracts are unaffected comes from the company spokesperson, not from the filing.
The Microsoft figure in the S-1 is conditional. The filing says payments are subject to delivery and availability-of-service requirements, so the amounts depend on Nscale delivering capacity. Data Center Knowledge framed the Loughton cancellation as an example of how customer commitments do not guarantee electricity will arrive in time to meet commercial schedules.
Why It Matters Beyond One Site
The reports tie Loughton to a wider grid constraint. UK Power Networks said many data centers are awaiting national transmission works, and Nscale called the issue London-wide. Data Center Knowledge reported that Nscale has not publicly detailed what it spent on Loughton or whether any termination payments apply. For developers, the gap between a 2027 operating target and a power date reported as early to mid-2030s shows that a signed tenant does not by itself put a campus on schedule.
The operator's stated position under the Utilities Act is that it cannot discuss individual connections. The reported power timeline for Loughton came from press accounts and company statements rather than from a utility announcement.
What Happens Next
None of the sources reports a scheduled, on-the-record next step for Loughton. There is no grid connection date, planning hearing, construction milestone or replacement tenant. Nscale has said only that it is exploring alternative power sources and remains committed to the site. UK Power Networks has declined to discuss the connection.
Nscale's Form S-1 was filed with the SEC on Sept. 18, 2026. The sources reviewed do not report a pricing date for the offering. Amendments to that registration statement would appear on SEC EDGAR.
