Microsoft Walks Away From Nscale's Flagship Essex Site After the Grid Said Not Before the 2030s -- Weeks After an S-1 That Puts 85% of a $103 Billion Backlog on Microsoft and Anthropic

Microsoft "has pulled out of a data centre deal with British cloud provider Nscale, Britain's Telegraph newspaper reported on Sunday", Reuters wrote on October 18, 2026. "The newspaper did not specify why Microsoft withdrew from the project. Microsoft declined a Reuters request for comment." The reason the Telegraph did report is power: "National power grid officials, it reported, had told Nscale they did not expect a power supply for the data centre until the 2030s." Dealroom, summarising the Telegraph, Bloomberg and Guardian coverage, says the Loughton, Essex site "was set to house 23,040 Nvidia GB300 GPUs for Microsoft Azure, with delivery planned for the first quarter of 2027."

The Nscale response

"Our relationship with Microsoft remains strong and long-term, and this unfortunate London-wide grid issue has no impact on our other contracts," an Nscale spokesperson told Reuters. "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." Dealroom reports that Microsoft is understood to remain on board for an Nscale project in Norway, where a separate Glomfjord site is six months behind schedule with 6.4 MW of a planned 30 MW running.

Why the timing hurts

Nscale filed for a New York listing in September. Quartz, citing Bloomberg's reading of the filing, reported that Microsoft and Anthropic "together account for 85% of its $103 billion in total contract value": agreements with Microsoft worth about $43.8 billion through 2033, and an August deal with Anthropic worth $44.6 billion to supply compute at a planned eight-gigawatt facility in West Virginia, for which "Nscale has not yet secured financing". The Anthropic contract lets Anthropic walk away if Nscale misses defined milestones or performance levels. Reuters describes the Nvidia-backed company "scaling from $100 million to more than $103 billion in total contracted value in just two and a half years", competing with CoreWeave, Nebius, Crusoe and Lambda. Dealroom notes the filing "does not show how much, if any, was tied to Loughton", and that the listing could value Nscale at up to $35 billion.

The politics are awkward too. Loughton was part of Microsoft's £22 billion UK infrastructure pledge announced during President Trump's state visit, and the Starmer government described it as the "largest UK sovereign AI datacentre" in its 2025 AI strategy. The Guardian found in March that the site was still an operational scaffolding yard. Dealroom quotes the commentator Sam Bowman on X: "Billions of pounds lost on a single project because we can't connect it to the grid for half a decade." The exit also arrives in a cooler market: Dealroom says Nvidia-backed Firmus shelved its IPO in October amid weak demand, and this digest covered CoreWeave's credit concerns on October 16.

What remains uncertain. Microsoft has given no reason, and the Telegraph's grid explanation is the only one on record. Whether any of the $43.8 billion in Microsoft statements of work depended on Loughton is not disclosed. Nscale's "alternative power sources" are unspecified, and the IPO valuation and raise come from press reports rather than the filing. We could not read the Telegraph article directly and rely on Reuters and Dealroom for its contents.

Analysis: Neoclouds sell a backlog, and backlogs are promises to deliver GPUs in buildings with power. When the grid date slips from 2027 to the 2030s, the customer with alternatives leaves, and Microsoft has many: it announced on October 12 that it is expanding its own Azure Maia systems to multi-gigawatt deployments. The exposure runs the other way for Nscale, whose two anchor customers are also its two concentration risks, one of them unfinanced. For teams planning inference capacity, the practical reading is to treat a provider's contracted value as a sales figure, ask for the energisation date of the specific site serving you, and keep a second region in the plan.