Microsoft drops Nscale's Essex AI data center as power wait stretches to 2030s
Microsoft drops Nscale's planned Essex AI data center
Microsoft has walked away from a planned AI data center in the U.K. that Nscale, a company spun out of bitcoin mining, was set to build and run. The decision followed a warning from the local grid operator that the site may not have enough power until the early-to-mid 2030s.
The Guardian reported the withdrawal, following initial reporting by the Financial Times.
The site, the chips and the 2027 deadline
- The site is in Loughton, Essex, about 6 miles northeast of London.
- It was meant to house 23,040 Nvidia chips.
- The plan was to supply 50 megawatts of computing capacity to Microsoft's Azure cloud by early 2027.
- Nscale announced the project last year alongside Microsoft, Nvidia and OpenAI.
- When the Guardian visited in February, the site was still a working scaffolding yard.
What the grid operator told Nscale
UK Power Networks, which runs the local grid, told Nscale there may not be enough capacity at the site until the early-to-mid 2030s, according to the Guardian. Megawatts measure electrical power, and data centers need a large, steady supply of it to run AI chips.
Nscale clears the site and keeps other Microsoft work
Nscale has since cleared the location and is looking at other ways to bring power to it. The company said its other Microsoft contracts remain in place.
What comes from reporting and what is not public
The withdrawal, the planned chip count, the 50 megawatt target and the grid operator's warning all come from press reports: the Guardian's account, which followed the Financial Times. The supplied material does not include a public statement from Microsoft about the decision.
Why the setback matters for bitcoin miners moving into AI
Nscale grew out of Arkon Energy, which built sites for bitcoin mining — running computers that secure the bitcoin network in return for coins. Its founder, Josh Payne, turned that experience in securing land and power into a business selling computing to AI companies. Many listed mining companies are now trying similar plans.
In a March report, CoinDesk said public miners had announced more than $70 billion in AI and high-performance computing contracts. They had also cut their combined bitcoin holdings by more than 15,000 BTC from their peaks, partly by selling coins to pay for the buildout.
Mining economics were already tight. The same report put the average listed miner's cash cost to produce one bitcoin near $80,000 in the fourth quarter of 2025, while bitcoin was trading around $70,000 by March.
AI contracts pay steadily for years, but the facilities cost far more to build. Estimates put an AI-ready site at $8 million to $15 million per megawatt, compared with roughly $700,000 to $1 million for bitcoin mining.
Power is the shared bottleneck. U.K. data center grid-connection requests total about 73 gigawatts, according to the report.
What is still unclear
The sources do not say whether Nscale can secure enough power for the Loughton site another way, or when that might happen. They also do not say what Microsoft plans to do instead.
Sources
Newisty Editorial Team covers technology, cryptocurrency, digital products, online platforms, developer tools and the wider digital economy. Our content is researched from official sources, company announcements, public documentation, market data and other primary or reputable sources. Articles are reviewed and edited before publication for clarity, accuracy and useful context.