Overview
- Multiple outlets reported on Sunday that Microsoft terminated its agreement to anchor Nscale’s planned Loughton, Essex data centre, leaving the site without a named customer.
- Nscale filed an S-1 in September seeking about $3 billion in a New York listing and disclosed a $103.4 billion contracted backlog that is highly concentrated, with Microsoft accounting for roughly $43.8 billion.
- Research from UK grid operators shows the Loughton site may not get sufficient mains power until the early to mid-2030s, which Nscale says it is trying to address by exploring alternative power sources.
- The company is already facing execution problems elsewhere, including delays, fires and regulatory holdups at its Glomfjord, Norway flagship that have reduced live capacity and triggered penalties.
- The loss of an anchor tenant comes as investor appetite for capital-intensive 'neocloud' data centres has cooled and increases the chance Nscale will need to delay or price its IPO more conservatively, which could affect jobs, local contractors and the company’s ability to deliver on large customer commitments.