Microsoft scraps UK data center deal with Nscale, putting IPO plans at risk

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...