Microsoft Reportedly Cancels Nscale Deal for 23,000 Nvidia AI Chips at Essex Data Centre

Microsoft has reportedly cancelled a major agreement with British artificial intelligence infrastructure company Nscale involving plans to deploy more than 23,000 Nvidia AI processors at a proposed data centre in Essex, raising further questions about the UK’s ability to deliver large-scale AI infrastructure.

The project, announced in September 2025, was intended to create one of the UK’s largest AI supercomputing facilities at Loughton, Essex. The planned 50MW site was designed to support Microsoft’s Azure cloud services and provide the computing capacity needed to run increasingly demanding AI workloads.

The reported cancellation comes amid growing concerns about delays to British data centre developments, particularly difficulties securing sufficient electricity and connecting new facilities to the national power grid.

Power supply problems threaten project

The planned facility was expected to house 23,040 Nvidia GB300 graphics processing units (GPUs), specialised processors used to train and run advanced AI models. Under the original agreement, the chips were due to arrive from the first quarter of 2027. The data centre was designed to provide an initial 50MW of computing capacity, with the potential to expand to 90MW.

However, the project has encountered significant difficulties obtaining the electricity needed to operate the facility.

Reports indicate that UK Power Networks has told Nscale that sufficient power may not be available until the early 2030s, several years beyond the original timetable. The delay has cast doubt on the project’s ability to begin operations as planned.

Microsoft’s reported withdrawal from the agreement leaves Nscale without its previously announced anchor customer for the Essex site, creating a significant commercial challenge for the project.

Neither the original announcement nor Microsoft’s broader investment commitments guarantee that every planned facility will be delivered on schedule.

Setback for Nscale’s expansion plans

For Nscale, the reported cancellation represents a setback as the company attempts to establish itself as a major international provider of AI computing infrastructure.

The company has pursued large-scale agreements with Microsoft across several countries, including the United States, Norway and Portugal. Its October 2025 announcement outlined plans to provide approximately 200,000 Nvidia GB300 GPUs across multiple locations, with the Essex development forming part of that wider expansion.

The UK project was particularly significant because it was presented as a major step towards establishing domestic computing capacity for advanced AI services.

Microsoft had also highlighted the development as part of its wider UK investment programme, which includes spending on cloud infrastructure, data centres and AI capabilities. In May 2026, Microsoft reiterated its plans for the Loughton supercomputer in an article outlining the importance of infrastructure to Britain’s AI ambitions.

The reported withdrawal could complicate Nscale’s efforts to secure financing and attract further customers for the Essex facility.

Questions over Britain’s AI ambitions

The difficulties facing the Loughton project highlight a broader problem for the UK’s ambition to become a leading destination for AI development.

Building advanced AI infrastructure requires more than access to expensive processors. Data centres need substantial electricity supplies, suitable buildings, cooling systems and reliable connections to the national grid.

With demand for AI computing increasing, delays in delivering these essential resources risk undermining investment plans and pushing projects years beyond their intended opening dates.

The Essex development had been promoted as a flagship example of how investment from major technology companies could strengthen the UK’s position in the global AI industry.

Its difficulties now raise questions about whether the country’s electricity infrastructure can keep pace with the demands of the rapidly expanding data centre sector.

For Nscale, the immediate challenge will be finding a viable path forward for the site. For the UK, the situation underlines the importance of securing the power infrastructure needed to turn ambitious AI investment announcements into operational facilities.