Microsoft has terminated its agreement to anchor Nscale’s planned £2 billion data center in Loughton, Essex. The startup is preparing a New York Stock Exchange listing, so the timing is unfortunate.
The culprit is not chips, demand, or a boardroom spat. It is the electrical grid. Power for the site is not expected until the early to mid-2030s, which is a long time to keep 23,000 Nvidia AI chips waiting.
What fell apart in Essex
Under the original plan, Microsoft would lease 23,000 Nvidia AI chips at the Loughton facility. The site was designed to deliver about 90 MW of power and was slated to open in 2027.
That schedule has now collapsed. UK Power Networks will not be able to supply sufficient power until the early to mid-2030s, according to the research findings. Those findings describe the grid connection problems as severe.
For Nscale, losing the anchor tenant is worse than one empty building. Loughton now has no announced customer.
Nscale says it remains committed to the Loughton project. It is looking for alternative power sources.
The IPO math gets harder
The cancellation lands while Nscale is working toward a NYSE listing. The company is targeting a $35 billion valuation and aims to raise $3 billion. Its S-1 registration statement was filed on September 18, 2026.
On paper, Nscale’s order book looks enormous. The company reports a contracted backlog of $103.4 billion. Microsoft accounted for approximately $43.8 billion of that figure.
Nscale currently operates about 55 MW of capacity in Europe against a much larger pipeline of projects, which means most of the contracts behind that headline backlog are not live yet.
Loughton is not the only site running behind. At Nscale’s flagship facility in Glomfjord, Norway, just 6.4 MW is live out of a planned 30 MW. Delays there have already triggered penalties.
How Nscale got here so fast
Nscale was founded in 2024 by Josh Payne and spun out of Arkon Energy. It built credibility quickly through partnerships with Nvidia and Anthropic. Microsoft’s commitment at Loughton was one of the most visible endorsements of all, and it aligned with a £22 billion investment pledge.
What this means for Nscale and the AI build-out
For anyone sizing up the planned listing, the central issue is conversion. How much of the $103.4 billion backlog can actually be delivered, and on what timeline? Microsoft’s roughly $43.8 billion share shows how concentrated that backlog is with a single counterparty.
The research findings suggest the cancellation may dampen confidence in Nscale’s ability to turn its backlog into revenue. Watch for how the S-1 and any amended filings describe the Loughton situation, the Glomfjord penalties, and the composition of the remaining backlog.
Disclosure: This article was edited by Diego Almada Lopez. For more information on how we create and review content, see our Editorial Policy.