Microsoft has canceled its planned AI data center project with Nscale in Loughton, Essex, after a power supply delay pushed potential grid availability into the early-to-mid 2030s. The facility had been due to serve Microsoft Azure by early 2027.
Key takeaways
- UK Power Networks told Nscale that sufficient electricity capacity might not arrive until the 2030s.
- The Essex plan called for 23,040 Nvidia chips.
- Nscale says its other Microsoft agreements remain intact.
Microsoft’s exit leaves Essex site without its planned customer
The Loughton facility was designed to deliver 50 megawatts of computing capacity to Microsoft Azure, using 23,040 Nvidia chips. UK Power Networks, the local grid operator, told Nscale that enough power might not be available until the early-to-mid 2030s—well beyond the original early 2027 target.
According to Nscale’s press release, the Loughton campus was announced with Microsoft in 2025, while OpenAI and Nvidia belonged to a separate Stargate UK platform; CoinDesk reported that the project was announced alongside Microsoft, Nvidia and OpenAI. The company has since cleared the site and is exploring alternative ways to supply electricity.
Without another power source or faster grid upgrades, the cleared Essex site could remain unused for years. Nscale said its other Microsoft contracts remain in place.
Nscale’s bitcoin mining roots meet AI construction demands
Nscale grew out of Arkon Energy, a business that developed bitcoin mining sites. Founder Josh Payne applied his experience securing land and electricity for mining to a business selling computing capacity to AI companies.
Public bitcoin miners have pursued the same shift. By March 2026, they had announced more than $70 billion worth of AI and high-performance computing contracts. Their combined bitcoin holdings had also fallen by more than 15,000 BTC from their peaks, partly through coin sales used to fund construction.
AI contracts offer steady payments over several years, but the facilities require much more spending than mining sites. CoinShares estimates put construction costs for an AI-ready facility at $8 million to $15 million per megawatt, against roughly $700,000 to $1 million per megawatt for bitcoin mining. AI customers also expect continuous server availability.
Grid queues and construction costs slow delivery
Contracted AI capacity substantially exceeds capacity already generating customer payments. CoinShares counted more than 4 gigawatts under contract across the miners it tracks, but only about 550 megawatts were billing customers.
The backlog of contracts held by those miners surpassed $100 billion, even though their annualized AI revenue was only slightly above $1 billion. The figures separate signed business from operating facilities that have begun collecting revenue.
Microsoft’s exit from the deal comes amid a much wider queue for UK electricity connections. Energy regulator Ofgem says data center projects account for at least 80 gigawatts of the demand connection queue, which rose from 41 to 125 gigawatts between November 2024 and June 2025, while CoinDesk reports about 73 gigawatts of demand.
Ofgem is considering tougher rules because applications for projects that never get built hold up developments ready to proceed.
Article produced with the assistance of artificial intelligence and reviewed by the editorial team.