TLDR
- Microsoft (MSFT) stock was down 1.93% after reports it pulled out of a data center deal with Nscale.
- The Telegraph said Microsoft ended its agreement for the Loughton, Essex site.
- Grid officials reportedly told Nscale power would not arrive until the 2030s.
- Nscale says its Microsoft relationship is strong and it is exploring other power sources.
- Nscale filed for a US IPO last month and lists Microsoft and Anthropic as expected major customers.
Microsoft (MSFT) stock was down 1.93% in the latest quote shown with the BBC report. The move followed news that the company pulled out of a UK data center deal with Nscale.
The Telegraph broke the story on Sunday, and Reuters followed. Microsoft recently ended its agreement for the Loughton, Essex site.
Microsoft declined to comment to both Reuters and the BBC. The Telegraph did not say why the company withdrew.
What the Reports Say About the Delay
Nscale reportedly faced repeated delays on the project. Grid officials told the company they did not expect a power supply until the 2030s.
The site was due to get power at the end of this year. That timeline is now off the table.
Nscale called it an “unfortunate London-wide grid issue.” It said the problem has no impact on its other contracts.
A spokesperson said the relationship with Microsoft “remains strong and long-term.” Microsoft is one of Nscale’s two largest customers.
Nscale still says it is committed to Loughton and the UK. It is looking at alternative power sources for the site.
The company is also exploring other expansion sites in the UK. No locations were given.
Nscale’s Wider Business
Nscale filed for a US initial public offering last month. Its prospectus names Microsoft and Anthropic as expected major customers.
The Nvidia-backed (NVDA) firm provides compute, power and data centers. It also sells software for training and running AI models.
Nscale competes with CoreWeave (CRWV), Nebius (NBIS), Crusoe and Lambda. It has grown from $100 million to more than $103 billion in total contracted value in two and a half years.
Nscale pledged £2bn for the Loughton facility last year. Microsoft was set to fund a supercomputer there, and the site is expected to create 250 permanent jobs.
Last month, Microsoft said part of its $30bn UK investment would go toward the Loughton supercomputer. Nscale and Microsoft still work together on projects in Norway, Portugal and the United States.
As of Sunday, Microsoft has not commented. Nscale says it is exploring alternative power sources for Loughton.
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