Microsoft has withdrawn from a project to build the UK’s largest AI data centre on the edge of London.
The computer and software giant pulled out of the massive development planned for Loughton in Essex.
The vast new facility was due to have received its power supply by the end of the year but this is understood to have been delayed until the 2030s.
Microsoft has pulled out of a new AI centre in Loughton, Essex
AFP/Getty
But shadow business minister Peter Fortune, MP for Bromley and Biggin Hill, stressed: “Microsoft has reportedly pulled out of a planned £2bn data centre in Loughton, Essex, after being told power won't arrive until the 2030s.
“If a project this big can't get plugged in, what does that tell firms hoping to expand in Britain?”
Microsoft had planned to fund a supercomputer at the Essex site but has now ended its role in the project.
A spokesperson for the company said: “This decision relates to a single site.
“We remain committed to our partnership with Nscale, including work to build robust digital infrastructure and support AI growth globally.”
Nscale’s proposed AI data centre in Loughton, Essex
Nscale
Nscale stressed that the power problem was due to a “London-wide grid issue”.
A spokesman explained: "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.
"This unfortunate London-wide grid issue has no impact on our other contracts.”
He added: "Our relationship with Microsoft remains strong and long-term."
The new centre is expected to create 250 permanent jobs.
However, there have been growing warnings about whether the UK’s power system can cope with the new demands of AI centres.
Local government minister Matthew Pennycook
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Local government minister Matthew Pennycook, MP for Greenwich and Woolwich, made the decision which was opposed by Tower Hamlets Council and the Save Brick Lane campaign.
Tower Hamlets mayor Lutfur Rahman called the decision “deeply disappointing and a missed opportunity to deliver the social and affordable housing that Tower Hamlets residents urgently need.”
The Save Brick Lane campaign also said it was “deeply disappointed” by the decision, which it described as “clearly rushed”.
Mayor of Tower Hamlets, Lutfur Rahman
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Property owners Truman Estates and Zeloof LLP plan to redevelop three sites in and around Brick Lane.
Their plan includes building five office buildings at the Truman Brewery between Brick Lane and Spital Street, along with a cinema, supermarket, a market and 44 homes, of which six would be for social rent.
It also includes more offices at Ely’s Yard, and a data centre in Grey Eagle Street, both just to the west of Brick Lane.
The council and the Save Brick Lane campaign both opposed the plans, arguing that a housing development would be a better use of the site.