Microsoft Pulls Out of Nscale's Loughton Data Center Deal as the UK Firm Prepares a NYSE Listing, Telegraph Reports

Microsoft has walked away from a deal to anchor Nscale's planned data center in Loughton, Essex, according to a Telegraph report published Sunday, Oct. 18. The British AI infrastructure company is preparing a New York Stock Exchange listing.

The Telegraph said Microsoft recently terminated the agreement. It did not report a reason. Microsoft did not comment to the newspaper and has not publicly addressed the report.

What Microsoft was supposed to do at Loughton

Microsoft was set to be the anchor tenant at Nscale's first UK data center, leasing 23,000 Nvidia AI chips. The site was planned at up to 90 MW. The deal was tied to Microsoft's £22 billion UK AI infrastructure pledge, announced during Donald Trump's 2025 state visit to Britain.

With Microsoft gone, Loughton has no announced customer.

The power problem

The Telegraph reported that national grid officials told Nscale they do not expect a power supply for the site until the 2030s. Other reports put the grid timeline at the early to mid-2030s and name UK Power Networks as the operator.

That is a long wait for a facility originally slated to open in 2027.

The grid delay is the documented problem at the site. Whether it drove Microsoft's decision is another matter. Microsoft has given no explanation, and the Telegraph did not say what prompted the termination.

Nscale's position

Nscale told the Telegraph it is staying put. "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," a spokesperson said.

The spokesperson added: "Our relationship with Microsoft remains strong and long-term, and this unfortunate London-wide grid issue has no impact on our other contracts."

That claim is Nscale's own. The company has not detailed which alternative power sources it has in mind.

A backlog built on two customers

Nscale filed its S-1 on Sept. 18, 2026, for an NYSE listing under the ticker NSCL. The company is reported to be targeting a valuation of about $35 billion and a raise of up to $3 billion, with pricing possible as soon as this month.

The filing puts Nscale's contracted backlog at $103.4 billion. Microsoft accounts for roughly $43.8 billion of it, in deals stretching to 2033. Microsoft and Anthropic together make up about 85% of Nscale's contracts, per the prospectus.

Nscale was founded in 2024 by Josh Payne and is backed by Nvidia. It says it grew from $100 million to more than $103 billion in contracted value in about two and a half years.

A backlog is a promise, not revenue. Nscale currently operates about 55 MW of capacity in Europe, a fraction of what its pipeline calls for. Microsoft has not said the termination touches any of its other Nscale contracts, and Nscale says it does not.

Norway is running late too

Loughton is not the only site behind schedule. At Nscale's flagship campus in Glomfjord, Norway, only 6.4 MW of a planned 30 MW is live. The project is about six months behind, according to the Telegraph.

Two delayed sites do not make a pattern on their own. They do bear directly on the question prospective buyers of the stock will ask: how much of $103.4 billion turns into powered, operating capacity, and when.

A rough stretch for AI infrastructure listings

The timing is awkward. CoreWeave, a direct competitor, saw its shares fall about 25% last week, its worst week since November, after a co-founder said the company was exploring investment-grade debt markets to fund its build-out. Separately, Australian data center developer Firmus scrapped its planned IPO after the offering failed to draw enough support at the marketed price.

The sector is carrying tens of billions of dollars in borrowing to finance data center construction. Nscale's own filing shows how heavily its story leans on a small number of counterparties.

What comes next

U.S. markets are closed for the weekend, so any market reaction to the Telegraph report cannot show up before Monday's session. Nscale has not said whether the termination will change its pricing or timing.

The open questions are specific: why Microsoft ended the Loughton agreement, whether it covers any other Nscale sites, and whether Nscale amends its S-1 to reflect the loss of its anchor tenant before it prices.