Nscale Faces IPO Setback as Microsoft Reportedly Scraps Essex AI Deal
Nscale has reportedly lost Microsoft as the anchor customer for its planned Essex data centre, dealing the British artificial intelligence infrastructure company another setback as it pursues a US initial public offering.
Microsoft recently notified Nscale that it was terminating the agreement for the Loughton facility, the Telegraph reported on Sunday. The project has faced repeated delays, with grid officials telling Nscale that electricity supplies are not expected until the 2030s.
The cancellation follows reports of construction problems at another Nscale facility in Norway with cooling leaks, regulatory hurdles and a fire.
Nscale said it remained committed to Loughton and was exploring alternative power supplies and other UK expansion sites. Its relationship with Microsoft remained strong, and the grid issue would not affect other contracts, a spokesman told the Telegraph.
The original timetable envisaged a much earlier start. In September 2025, Nscale announced plans to install 23,040 Nvidia GB300 graphics processing units at Loughton in the first quarter of 2027. It described an initial 50 megawatts of AI capacity, expandable to 90 megawatts, supporting Microsoft’s Azure services in Britain.
The setback comes after Nscale filed for an IPO on September 18. The company said it had applied to list on the New York Stock Exchange under the symbol NSCL, with the share count and price range still undetermined at that point.
The Telegraph reported that the flotation could value Nscale at as much as $35 billion, compared with a private valuation of about $15 billion.
Customer concentration adds to the stakes. Microsoft and Anthropic account for about 85% of Nscale’s contracts, according to its IPO filing. Losing the Essex commitment puts delivery schedules and access to electricity under closer scrutiny ahead of the listing.
