Microsoft has withdrawn from funding a supercomputer at the UK's largest planned AI data centre in Loughton, Essex, according to reporting by the BBC.
Nscale announced last year it had committed £2bn to build the facility. Microsoft had pledged to fund a supercomputer at the site as part of a $30bn investment in the UK announced last month.
The project has hit a critical obstacle. Power supply to the data centre will not arrive until the 2030s, delayed by what Nscale describes as a "London-wide grid issue." The facility was originally due to receive power by the end of this year.
Nscale said in a statement to the BBC that it remains committed to the Loughton project and is exploring alternative power sources. The company also plans to expand to other sites in the UK. Nscale added that its relationship with Microsoft remains strong for their other joint projects in Norway, Portugal and the United States.
Microsoft declined to comment on its withdrawal.
The data centre was expected to create 250 permanent jobs when it opened. The power delay represents a significant setback for a project that had been positioned as central to the UK's AI infrastructure ambitions. Nscale's reference to a broader London-wide grid constraint suggests the problem extends beyond the single site.
The timing adds complexity to Microsoft's UK investment strategy. The company announced last month that part of its £22bn commitment to Britain would support the Loughton supercomputer, but has now stepped back from that particular component. Nscale's insistence that it remains committed and is exploring alternatives suggests the company may proceed with the project independently or with different partners, though the decade-long power delay creates substantial uncertainty about the timeline.