Microsoft pulls out of data center deal in UK: Report
What's the story
Microsoft has pulled out of a data center deal with British cloud provider Nscale, The Telegraph reported. The tech giant, one of Nscale's two biggest customers, recently canceled its contract for the Loughton-based data center in Essex. However, the reason behind Microsoft's withdrawal from the project remains unclear as Microsoft has not responded to queries for a statement.
Project delays
Nscale facing repeated delays with the data center project
Nscale has been facing repeated delays with the Loughton data center project.
According to The Telegraph, national power grid officials have told Nscale that they do not expect a power supply for the facility until the 2030s.
Despite these challenges, an Nscale spokesperson assured that its relationship with Microsoft remains strong and long-term, adding that this "unfortunate London-wide grid issue has no impact on our other contracts."
Expansion efforts
Nscale exploring alternative power sources for the site
The spokesperson also emphasized Nscale's commitment to both the Loughton project and the UK market.
They said, "We are exploring alternative power sources for the site, in addition to other expansion sites in the UK."
This statement shows that, despite Microsoft's withdrawal from this particular deal, Nscale is still focused on its growth plans within Britain.
Market presence
Nscale filed for an initial public offering in US
Last month, Nscale filed for an initial public offering (IPO) in the US.
The company's prospectus indicated that Microsoft and Anthropic would be its major customers.
As a provider of infrastructure such as compute, power, and data centers as well as software for training/running AI models, Nscale has grown rapidly since its launch.
Backed by NVIDIA, it has scaled from $100 million to over $103 billion in total contracted value within just 2.5 years.