Microsoft pulls out of UK data centre deal with Nscale, Telegraph reports Simon Mugo Sun, October 18, 2026 at 5:52 AM EDT 2 min read MSFT -1.93% ANTH.PVT Trade MSFT on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
Investing.com -- Microsoft (NASDAQ) has withdrawn from a planned UK data centre agreement with artificial intelligence infrastructure provider Nscale, potentially complicating the British company's initial public offering plans, according to the Telegraph.
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The agreement involved Nscale's proposed data centre in Loughton, Essex, where Microsoft was expected to become the anchor tenant.
The Telegraph did not establish a specific reason for Microsoft's withdrawal, although the project has faced delays and difficulties securing electricity supplies.
Authorities reportedly informed Nscale that the facility might not receive a grid connection until the 2030s, raising questions about its development timeline.
Nscale's flagship data centre in Norway is also approximately six months behind schedule, with only 6.4 megawatts of its planned 30-megawatt capacity operational.
The developments come as Nscale prepares for a potential IPO that could raise as much as $3 billion as early as October.
According to its IPO filing, Microsoft and Anthropic account for approximately 85% of Nscale's contracts, highlighting its reliance on major technology customers.
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Losing Microsoft as the anchor tenant could complicate Nscale's expansion plans and increase investor scrutiny ahead of the listing.
Nscale said it remained committed to developing the Loughton site and was exploring alternative power sources and additional UK expansion opportunities.
The company maintained that its relationship with Microsoft remained strong and that the electricity supply problems would not affect other contracts.
Microsoft had not publicly commented on the reported withdrawal.
The development comes amid growing investor concerns about financing requirements and execution risks associated with AI infrastructure projects.
Shares of rival AI infrastructure provider CoreWeave (NASDAQ) fell approximately 25% last week amid concerns about borrowing plans and data centre financing.
Separately, Australian data centre developer Firmus recently abandoned its planned IPO after failing to attract sufficient investor demand at the proposed valuation.
The setbacks highlight growing pressure on AI infrastructure companies to demonstrate that ambitious expansion plans are financially sustainable.
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