Microsoft has pulled out of a deal to become the anchor tenant at Nscale’s first British data centre in Loughton, Essex, as Nscale seeks to raise as much as US$3 billion in an IPO as soon as October, Bloomberg reported on 18 October.
Key points
- Microsoft had been set to anchor Nscale’s first British data centre in Loughton, Essex.
- Authorities do not expect power to reach the site until the 2030s.
- An IPO filing puts Microsoft and Anthropic at around 85 per cent of Nscale’s contracts.
- Nscale’s Norway site is six months behind schedule, with 6.4 MW of an intended 30 MW running.
Loughton power supply expected in the 2030s
The Essex site has encountered a series of delays. Authorities have told Nscale that they do not expect to supply power to the facility until the 2030s. The Telegraph gave no specific reason for Microsoft’s withdrawal.
Microsoft’s planned role was as the anchor tenant, making its exit a change to the customer plans for the Loughton facility. The power timetable is a separate constraint on the site. Nscale is exploring alternative sources of power, according to a spokesperson for the company.
The spokesperson said Nscale remained committed to the Loughton project and to the UK, and was considering other UK expansion sites, Bloomberg reported. The company also said its relationship with Microsoft remained strong and long-term. According to the spokesperson, the grid issue affecting London had no impact on Nscale’s other contracts.
Microsoft did not comment to the Telegraph and did not immediately respond to Bloomberg’s queries. The proposed Essex tenancy was one part of a wider commercial relationship that Nscale says it expects to continue.
Microsoft and Anthropic account for around 85 per cent
An IPO filing puts Microsoft and Anthropic at around 85 per cent of Nscale’s contracts, Bloomberg reported. Microsoft’s departure from the Essex deal therefore concerns a company that relies heavily on contracts with those two customers, while it seeks public-market financing.
Nscale is seeking to raise as much as US$3 billion through an IPO as soon as October. Its Loughton plans had paired the company’s first British data centre with a prospective anchor tenant. Nscale says the London grid issue has no impact on its other contracts.
The fundraising ambition follows other financing plans. AI Affairs previously reported that Nscale raised $3.36bn in convertible financing led by Third Point. In a separate account of its listing plans, AI Affairs reported that Nscale was targeting a $30 billion valuation for a US IPO after revenue rose 1,252%.
Norway facility has 6.4 MW running
Nscale’s flagship data centre site in Norway is six months behind schedule. It has 6.4 MW running out of an intended 30 MW. The delay leaves another part of the company’s planned capacity short of its intended level while it pursues the IPO.
The Norway delay had already entered the discussion of Nscale’s listing plans. AI Affairs previously reported the six-month setback alongside plans for a $35 billion IPO. At Loughton, the reported power timetable extends into the 2030s, while Nscale says it is looking at alternative supply.
CoreWeave falls 25 per cent as Firmus cancels IPO
Other AI data centre operators have faced a more difficult reception from investors. CoreWeave shares fell 25 per cent in the week ending 16 October, their worst weekly performance since November. The company’s co-founder had said CoreWeave was exploring borrowing in investment-grade debt markets.
Investors had grown cautious about the borrowing used by AI computing suppliers and their customers to fund data centre construction. Australian data centre operator Firmus scrapped its IPO plans after the deal failed to attract enough support at its marketed share price.
