At a glance
Microsoft has pulled out as anchor tenant of Nscale's planned data centre at Loughton in Essex, Nscale confirmed on 18 October 2026.
Neither company gave a reason. The Telegraph reported the site may not get grid power until the 2030s.
Nscale, founded by Newcastle-born former coal miner Josh Payne, is preparing a New York float reported at up to US$3 billion.
Microsoft's contracts with Nscale, across Texas, Portugal, Norway and the UK, are worth up to US$43.8 billion in total, and Nscale says the relationship remains strong.
Microsoft has walked away from anchoring Nscale's planned data centre at Loughton in Essex, Nscale confirmed on 18 October 2026. Microsoft has not said why it pulled out, but the Telegraph reported that grid operators told Nscale the Loughton site might not receive power until the 2030s.
The withdrawal comes as the London AI cloud company prepares to list on the New York Stock Exchange, seeking up to US$3 billion at a valuation of about US$35 billion, Bloomberg and the Financial Times have reported. Nscale was founded by Josh Payne, who grew up in Newcastle, worked in the Hunter Valley coal mines and built a Melbourne bitcoin miner, Arkon Energy, before spinning Nscale out of it in May 2024.
The Essex site was due to open in 2027
Loughton was planned as a £2 billion AI data centre starting at 50MW and growing to 90MW, Data Centre Review reported in July 2026. Microsoft had committed to take capacity there as the anchor tenant. By July the grid connection was reported to be running late for the planned 2027 opening, and Nscale had held talks with Bloom Energy about fuel cells to run the site until the grid caught up.
Nscale said it remained committed to Loughton and was looking at other power sources and further UK sites. A spokesperson said the grid problem in London had no effect on its other contracts, Capital Brief reported.
Microsoft's Nscale contracts run to US$43.8 billion
Nscale's US float prospectus, filed on 18 September 2026, shows Microsoft contracts worth "up to approximately $43.8 billion" through December 2033, covering GPU capacity in Texas, at Sines in Portugal, at Stargate Norway and at Loughton. Nscale says the relationship remains strong and long-term.
Anthropic holds agreements worth up to US$44.6 billion for a campus in West Virginia due online by the first half of 2028. Nscale says it has not yet lined up the financing to build it. Between them, the two customers make up about 85% of the US$103.4 billion Nscale has under contract.
Nscale had 81MW running at 31 August
Most of the capacity behind those contracts is still to be built. Nscale's prospectus lists 81MW of capacity online and earning revenue at 31 August 2026, out of 1,370MW it has running or signed up. Of the 81MW, 56MW sits in data centres owned by other companies, where Nscale rents the space and power and brings its own chips. The prospectus says big campuses take years to build, so renting space in halls that are already built "enable[s] us to provide compute capacity in the nearer term".
Nscale's prospectus names power as a limit on growth
The prospectus says Nscale's "ability to find appropriate sites for expansion will also be limited by access to power". Nscale opened an Asia-Pacific headquarters in Singapore in October 2025, and its prospectus lists one contracted site in the region, a 24MW rented hall in Indonesia. Australia's own AI compute providers grew the same way Nscale did: Sharon AI runs its Melbourne cluster inside NEXTDC's M3, and Australian AI infrastructure company Firmus runs its Melbourne chips in a CDC hall. On the evidence of Nscale's prospectus, halls with power connected decide where neocloud providers in Australia and overseas can grow.
What to watch
Nscale's float, reported for as soon as October 2026 but not yet priced, will show how investors value the company after the Loughton change. An updated prospectus would show whether Microsoft's contract value has changed. A new power source or a new tenant for Loughton would be Nscale's answer to the 2030s grid date.