Microsoft pulls out of UK's largest AI data centre

Microsoft pulls out of UK's largest AI data centre

A tech company has said it still plans to build the UK's largest AI data centre despite Microsoft pulling out of the project.

Nscale announced last year it had pledged £2bn to build and open a pioneering facility in Loughton, Essex.

However, the BBC understands that Microsoft, which said it would fund a supercomputer at the site, has terminated its involvement.

A spokesperson for Nscale said it was exploring alternative power sources and its relationship with Microsoft remained strong for their other projects together overseas. Microsoft declined to comment.

"We remain committed to both the Loughton project and the UK and we are exploring alternative power sources for the site, in addition to other expansion sites in the UK," Nscale said.

"Our relationship with Microsoft remains strong and long-term."

The data centre was due to receive its power supply at the end of the year.

But as first reported by the Telegraph on Sunday, Nscale has been told this will not happen until the 2030s.

"This unfortunate London-wide grid issue has no impact on our other contracts," Nscale told the BBC.

Nscale and Microsoft are still working together on projects in Norway, Portugal and the United States.

The Loughton site is expected to create 250 permanent jobs when it eventually opens.

Only last month, Microsoft announced that some of the $30bn (£22bn) it was investing in the UK would be used to fund the Loughton supercomputer.

Do you have a story suggestion for Essex? Contact us below.

Follow Essex news on BBC Sounds, Facebook, Instagram and X.