Microsoft withdraws from Essex AI datacentre project over power supply concerns

Microsoft has pulled out of a major artificial intelligence datacentre project in Loughton, Essex, over concerns about power supplies, the Guardian reported. The project is being developed by the British company Nscale and was intended to open next year. [1]

Ministers had previously heralded the Nscale site as the largest AI datacentre in the country when it was announced in 2025. However, doubts about the scheme emerged after the Guardian revealed in March that the chosen location was still an operational scaffolding yard. [1]

The loss of Microsoft leaves the development without its anchor tenant. UA.NEWS also reported the exit, citing the Guardian report. [1][2]

The setback comes amid a wider boom in artificial intelligence investment, which began rapidly expanding in 2025. That expansion has relied on heavy bond market financing and billions in commitments. [3]