Microsoft reportedly exits Nscale's Loughton data center

Microsoft has pulled out of a deal to be the main tenant at Nscale's planned data center in Loughton, Essex, the Telegraph reported on October 18, 2026. Nscale, a UK company that rents out AI computing power, is weeks away from a stock market listing that could raise up to $3 billion.

The timing is the story. Microsoft and Anthropic together account for about 85% of Nscale's contracts, so losing Microsoft at its flagship UK site lands just as investors are deciding what the company is worth.

What was reported

Microsoft was set to be the anchor tenant at Loughton, leasing 23,000 Nvidia AI chips there, Startup Fortune reports, citing the Telegraph. An anchor tenant is the first big customer that signs up. Its contract is often what makes a new data center possible to finance.

The Telegraph did not establish why Microsoft left, according to Investing.com. Microsoft has not commented publicly. Every outlet covering the story so far relies on the Telegraph's report.

The power problem

The site has a clear weak point: electricity. Authorities reportedly told Nscale that Loughton might not get a grid connection until the 2030s, according to The Next Web. Without that connection, a building full of AI chips cannot run.

Nscale says it is still committed to the site. A spokesman told the Telegraph the company is looking at other power sources and other UK locations. "Our relationship with Microsoft remains strong and long-term," he said. He added that "this unfortunate London-wide grid issue has no impact on our other contracts."

Loughton is not the only delay. The Next Web reports that Nscale's flagship site in Norway is six months behind schedule. Only 6.4 megawatts of a planned 30 megawatts is running there.

How much Nscale depends on two customers

Nscale has filed to list on the New York Stock Exchange under the ticker NSCL, Startup Fortune reports. The figures below come from that coverage of the filing:

Figure	Amount
Planned IPO size	Up to $3 billion
Share of contract value from Microsoft and Anthropic	About 85%
Microsoft's share of Nscale's 2025 revenue	73%
Microsoft deals signed since late 2025, running to 2033	$43.8 billion
Anthropic lease in West Virginia, signed in August	$44.6 billion

Startup Fortune adds that the Anthropic lease has not yet secured formal financing commitments, according to reporting on the filing.

A hard month for AI cloud companies

The report arrives during a rough stretch for companies that rent out AI chips. The Next Web notes that CoreWeave shares fell 25% last week, as investors questioned how CoreWeave carries its debt. In Australia, Firmus withdrew its planned IPO earlier this month.

Nscale says its wider relationship with Microsoft is intact. The open question is whether investors read Loughton as a one-site power problem, as Nscale describes it, or as a sign the company's biggest customer is rethinking its plans.

What this means for developers

For teams that buy or plan AI computing capacity, especially in the UK:

• Ask for megawatts running, not megawatts planned. Nscale's Norway site runs 6.4 of a planned 30 megawatts. When a provider quotes capacity, ask how much is connected to the grid today and when the rest goes live.
• Treat grid access as the real deadline. A London-area site that may wait until the 2030s for power cannot serve a 2027 project. If your plans depend on a new UK data center, ask for its grid connection date in writing.
• Check how concentrated your provider is. A company that earns 73% of its revenue from one customer can change course when that customer does. Keep workloads portable enough to move between clouds.
• Watch the IPO paperwork. If Microsoft's exit is confirmed, Nscale's filing may need to say so. That is where any change to its contracts would first appear in public.