Microsoft Cancels Nscale Data Centre Lease
Microsoft has called off a deal to lease computing capacity from Nscale over power supply concerns at its Essex data centre.
Updated on Nov. 4, 2026 in Data Centers
Microsoft cancelled a deal to lease computing capacity from Nscale after it emerged that the Essex data centre was unlikely to have a power supply until after 2030. Aker ASA, which owns around 23 per cent of Nscale, addressed the termination in its Q3 results presentation.
Why it matters
The cancellation highlights how power availability can determine whether large AI computing projects proceed on schedule. It also comes as Nscale prepares a New York IPO targeting a $35bn valuation.
Nscale's Series C valuation was $14.6bn in March 2026, and Aker invested around $350m in that round. The Essex data centre's power supply timeline, which is unlikely to be resolved before 2030, remains the key unresolved technical constraint.
The players
Microsoft
Microsoft is a major US technology company and a leading cloud and AI infrastructure provider that has committed large investments to UK data centres.
Nscale
Nscale is a UK-based neocloud provider building AI computing infrastructure and planning a New York IPO.
Aker ASA
Aker ASA is a Norwegian industrial holding company that owns around 23 per cent of Nscale.
Anthropic
Anthropic is an AI safety company developing the Claude family of AI models and is reported to be negotiating a new multibillion-dollar deal with Nscale.
The details
Microsoft cancelled the agreement after it emerged that the Essex data centre would be unlikely to have a power supply until after 2030. Nscale has more than doubled its activity and contract portfolio since its Series C, and is reported to be close to a new multibillion-dollar deal with Anthropic.
Timeline
March 2026: Nscale's Series C values the company at $14.6bn.
4 November 2026: Aker's Q3 results presentation addresses the Microsoft termination.
After 2030: Essex data centre is expected to receive a power supply.
The Tech Race
Gartner predicts that by 2030, 80 per cent of neocloud firms will cease independent operations, and the Nscale episode shows power access as a central pressure point. Nscale's reported Anthropic deal and planned IPO position it against rivals competing for scarce AI computing capacity.
For users of cloud and AI services, delays in data centre power supply can affect the availability and pricing of computing capacity. The episode shows that projects dependent on future grid connections may take longer to deliver services than planned.
The takeaway
Power availability is becoming as important as hardware in determining which AI infrastructure projects succeed. Readers following cloud or AI services should watch for capacity delays tied to grid connections.
Further reading
Explore more on Data Centers to see how power and capacity constraints shape the AI infrastructure race.
