Overview
- Microsoft told Nscale it was terminating its agreement for the Loughton, Essex site after local grid operator findings showed enough power likely will not be available until the early to mid-2030s, a decision reported over the weekend and confirmed in multiple outlets.
- The withdrawal removes the only publicly announced customer for the £2 billion Loughton project, which had been planned to host roughly 23,000 Nvidia AI chips and to open in 2027.
- The timing is acute for Nscale as it seeks a New York IPO and has reported a $103.4 billion contracted backlog that is heavily concentrated with Microsoft and Anthropic while only about 2.5% of that backlog was active as of late August.
- Pre-IPO financing of about $3.36 billion, including a $1 billion commitment from Nvidia, gives Nscale runway, but investors are pressing for a lower valuation range (reported proposals around $16–19 billion) as execution and power risks mount.
- The episode highlights a broader constraint on AI buildouts: lengthy grid-connection lead times that can leave costly facilities idle, which could narrow the market for neocloud listings, shift demand toward alternative power solutions, and affect local jobs and regional AI plans.