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Microsoft Drops Nscale's UK AI Data Center Plan as Grid Power May Not Arrive Until the 2030s
CoinDesk reports Microsoft has dropped a planned AI data center in Loughton, Essex, run by Nscale, a bitcoin-mining spinoff, because the local grid may not be able to supply power until the early-to-mid 2030s. CoinDesk says it highlights the power and financing hurdles miners face moving into AI.
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What happened: the site was due to supply compute by early 2027
CoinDesk reports that Microsoft has dropped a planned AI data center that Nscale was to operate in England. A data center is a facility that houses large numbers of servers and offers computing services externally. Nscale is a company spun out of a bitcoin-mining business. Microsoft pulled out because the local grid operator said it may not be able to supply the site until the early-to-mid 2030s.
CoinDesk cites the UK's Guardian: the site, in Loughton, Essex, was to house 23,040 Nvidia chips and supply 50 megawatts of compute to Microsoft's Azure cloud service by early 2027. The Guardian's report followed up an initial report by the Financial Times.
Per CoinDesk, UK Power Networks, which runs the local grid, told Nscale that sufficient capacity may be about a decade away. CoinDesk notes Nscale announced the project last year alongside Microsoft, Nvidia and OpenAI. When the Guardian visited in February, the site was still a scaffolding storage yard. CoinDesk says Nscale has since cleared it, is looking at other ways to obtain power, and says its other Microsoft contracts remain in force.
Grid queue and costs: the figures CoinDesk cites
CoinDesk says the setback highlights the power and financing challenges bitcoin miners face as they expand into AI infrastructure. CoinDesk says Nscale grew out of Arkon Energy, which built bitcoin-mining sites. Founder Josh Payne turned his experience securing land and power into a business selling computing capacity to AI companies. CoinDesk notes many listed miners are now taking the same approach.
CoinDesk notes AI contracts can pay steadily over many years, but the sites cost far more to build. By estimates CoinDesk cites, AI-ready facilities need roughly $8 million to $15 million per megawatt, versus roughly $700,000 to $1 million for bitcoin-mining facilities. CoinDesk also notes AI customers expect servers to run around the clock.
CoinDesk also notes that revenue takes time to arrive. It cites the latest mining report from fund manager CoinShares: among the miners CoinShares tracks, contracted AI capacity exceeds 4 gigawatts, but only about 550 megawatts is actually billing customers. These miners' contract backlog exceeds $100 billion, while annualized AI revenue is just over $1 billion.
CoinDesk cites UK energy regulator Ofgem: grid-connection requests from data center projects total about 73 gigawatts. Some applicants may never build yet hold up projects that are ready to go, so Ofgem is considering stricter rules.
CoinDesk argues that unless Nscale secures its own power or the grid speeds up dramatically, the newly cleared site could sit idle for years.
Key figures at a glance
| Item | What CoinDesk reports |
|---|---|
| Planned scale | 23,040 Nvidia chips, 50 MW of compute |
| Planned timeline | Supply Azure by early 2027 |
| Grid operator's view | Sufficient power may not be available until the early-to-mid 2030s |
| AI facility cost per MW (estimate) | About $8 million to $15 million |
| Mining facility cost per MW (estimate) | About $700,000 to $1 million |
| CoinShares: contracted AI capacity | Over 4 GW, of which about 550 MW is billing customers |
| CoinShares: backlog and annualized revenue | Backlog over $100 billion; annualized AI revenue just over $1 billion |
| Ofgem: data center grid-connection requests | About 73 GW in total |
Frequently asked questions
What is this news about?
Per CoinDesk, Microsoft has dropped Nscale's planned AI data center in Essex, England, because the local grid operator said power may not be available until the early-to-mid 2030s.
How is Nscale connected to bitcoin mining?
CoinDesk says Nscale grew out of Arkon Energy, which built bitcoin-mining sites. Founder Josh Payne turned his experience securing land and power into a business selling computing capacity to AI companies.
Are Nscale's other contracts with Microsoft affected?
CoinDesk says Nscale states its other Microsoft contracts remain in force.
What does Nscale plan to do next?
Per CoinDesk, Nscale has cleared the site and is looking at other ways to obtain power. CoinDesk argues the site could sit idle for years unless Nscale secures its own power or the grid speeds up dramatically.
What is the queue for data center grid connections in the UK like?
CoinDesk cites Ofgem: data center projects' grid-connection requests total about 73 gigawatts. Some applicants may never build yet hold up ready projects, so Ofgem is considering stricter rules.
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