{"url":"https://newsforagent.com/news/2026-10-18/microsoft-nscale-essex-data-centre-exit","markdown_url":"https://newsforagent.com/news/2026-10-18/microsoft-nscale-essex-data-centre-exit.md","title":"Microsoft Exits Nscale Essex Data Centre Deal","headline":"Microsoft Pulls Out of Nscale's Essex Data Centre Deal as $35 billion Listing Looms","description":"Microsoft has withdrawn from Nscale's Loughton data centre agreement, leaving the UK site without its anchor tenant.","section":"Divestitures","published_at":"2026-10-18T06:17:33+00:00","modified_at":"2026-10-18T06:17:33+00:00","author":"News Desk","key_takeaways":["Microsoft informed Nscale it was pulling out of the Loughton, Essex data centre agreement, where it was to be anchor tenant.","Nscale is seeking a Wall Street flotation worth up to $35 billion and was privately valued at $15 billion.","More than 40pc of Nscale's $103 billion in contracted revenue comes from Microsoft, and the site was to host 23,000 Nvidia AI chips."],"companies":[{"name":"Microsoft","is_primary":true,"profile_url":"https://akta.pro/company-profiles/000026e/microsoft","website":"https://www.microsoft.com"},{"name":"NVIDIA","is_primary":false,"profile_url":"https://akta.pro/company-profiles/000000q/nvidia","website":"https://www.nvidia.com"},{"name":"OpenAI","is_primary":false,"profile_url":"https://akta.pro/company-profiles/0000008/openai","website":"https://openai.com"}],"source":{"publisher":"The Telegraph","title":"Microsoft axes AI deal in setback for UK data centre pioneer","url":"https://www.telegraph.co.uk/business/2026/10/18/microsoft-axes-ai-deal-setback-uk-data-centre-pioneer/"},"other_sources":[],"tags":["Divestitures","Microsoft","NVIDIA","OpenAI"],"body_markdown":"[Microsoft](https://akta.pro/company-profiles/000026e/microsoft) has pulled out of a data centre agreement with British company Nscale in Loughton, Essex, where it was to be the anchor tenant, according to [The Telegraph](https://www.telegraph.co.uk/business/2026/10/18/microsoft-axes-ai-deal-setback-uk-data-centre-pioneer/). The US tech giant, one of Nscale's two largest customers, recently told the company it was ending the deal, which was announced last year.\n\n## Microsoft's Exit From The Loughton Site\n\nMicrosoft's backing for the Loughton data centre formed part of £22 billion in UK investments the company promised last year during Donald Trump's state visit. Sir Keir Starmer said the pledge was a step towards Britain \"becoming a world leader in AI\". The site, which contains thousands of high-end Nvidia AI chips, was originally intended to come online next year, but has faced repeated delays, with grid bosses telling Nscale they do not expect a power supply until the 2030s. Microsoft was the site's only announced customer, having agreed to rent 23,000 Nvidia AI chips there.\n\nNscale, founded by Australian entrepreneur Josh Payne two years ago, is backed by tech giants including [NVIDIA](https://akta.pro/company-profiles/000000q/nvidia) and has positioned itself as Britain's \"sovereign\" data centre provider. Its board includes former Facebook executives Sheryl Sandberg and Sir Nick Clegg. Nvidia chief executive Jensen Huang praised Nscale at an event in London, saying: \"You could be the most valuable UK startup they have created in the last 10 years.\"\n\nAn Nscale spokesman said: \"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.\" Microsoft did not comment.\n\n## Nscale's Listing Plans And Microsoft's Scale\n\nMicrosoft's decision threatens Nscale's attempts to push ahead with a Wall Street flotation worth up to $35 billion. Nscale has been privately valued at $15 billion and is seeking to raise billions of dollars in a float that could value it at more than twice that. More than 40pc of Nscale's $103 billion in contracted revenue comes from Microsoft, although the UK deal is believed to be a small part of that. Anthropic is another major customer.\n\nAccording to akta.pro [company records](https://akta.pro/company-data), Microsoft reported quarterly revenue of $82.9 billion in Q2 FY2026, up 18% year-over-year, with full fiscal year revenues exceeding $240 billion. Its AI business surpassed a $37 billion annual revenue run rate with 123% year-over-year growth, driven by Azure AI services and Microsoft 365 Copilot adoption. The company has over 220,000 employees globally.\n\n## Earlier Moves In Microsoft's AI Build-Out\n\nIn October 2026, Microsoft agreed a 1,100 MW, 20-year power supply deal with NiSource for its AI data centers, Yahoo reported. In June 2026, Chevron's Energy Forge One subsidiary signed a 20-year power agreement to develop Project Kilby, co-locating approximately 2.67 gigawatts of generation capacity with a Microsoft datacenter campus in Reeves County, West Texas, according to akta.pro records. In April, ChatGPT-maker [OpenAI](https://akta.pro/company-profiles/0000008/openai) suspended plans for a \"Stargate\" AI facility with Nscale on Tyneside, citing Britain's high electricity prices, The Telegraph reported.\n","publisher":{"name":"News for Agent","url":"https://newsforagent.com"}}