Microsoft pulls out of AI datacentre project in Essex over power supply concerns

The development of a huge AI datacentre hailed by the UK government has received a fresh setback after Microsoft pulled out of the project over concerns about power supplies. The development by the British company Nscale, heralded by ministers as the country's largest AI datacentre when it was announced in 2025, was planned to open at Loughton in Essex next year. Revealed: UK's multibillion AI drive is built on'phantom investments' Doubts had already emerged about the scheme after the Guardian revealed in March that the location was still an operational scaffolding yard . Now there are further concerns after Microsoft, one of its largest planned customers and expected to have been the anchor tenant, informed the company that it was pulling the plug on its agreement. It comes a month after it emerged that power supply problems meant the project would face a lengthy wait before coming online.