Nscale's £2bn Essex Data Centre Delayed to 2030s as Microsoft Pulls Out

The BBC reported that the data centre was due to receive its power supply at the end of the year, but Nscale has been told this will not happen until the 2030s, as first reported by The Telegraph on Sunday. The delay reflects a broader grid-connection problem in Britain: The Next Web reported that grid-connection times have become the single biggest brake on new data centres, with some UK projects facing waits stretching close to a decade for enough power. One estimate found more than a quarter of data-centre capacity slipped in 2025 alone, according to the report.

Microsoft was the only announced customer at the Essex site and had agreed to rent 23,000 Nvidia AI chips at the facility, The Telegraph reported. The newspaper said Microsoft's move threatened to undermine Nscale's attempts to push ahead with the flotation despite a brutal sell-off in AI computing stocks. Nscale and Microsoft are still working together on other projects in Norway, Portugal and America, according to the report.

Rival data centre developers have seen their share prices plunge over the last week on concerns that they will struggle to repay their debts as interest rates and inflation continue to rise, according to the report. Gartner said last week that $3.5 trillion could be written off by 2030 if the AI boom fails to deliver on its promises.

Gartner wrote that its research indicates enterprise and consumer AI revenue will be insufficient to support profitable returns on all planned AI capital expenditures during that period. Will Sommer, senior director analyst at Gartner, said AI providers are expected to spend nearly $1 trillion on AI infrastructure in 2026 and are forecast to invest an additional $6 trillion between 2027 and 2030.

Gartner said failure to achieve sustainable return on investment capital, or ROIC, on rapidly depreciating assets would almost certainly necessitate write-downs. Based on its projections, a continued AI infrastructure investment trajectory could leave more than $4 trillion in asset value exposed to write-down risk through 2032. In that scenario, Gartner does not expect the 12% ROIC to be achieved until the end of 2032 at earliest.

Gartner estimates AI-optimized IaaS spending will grow from $66 billion in 2027 to $174 billion in 2030. Sommer said the growth in spending on AI-optimized IaaS will be too low for most AI compute providers to recover their AI investments before the current generation of AI semiconductors is replaced. By 2030, Gartner predicts that cost pressure and a lack of a differentiating business model will force more than 80% of neocloud providers, or AI-specialized infrastructure providers, to cease independent operations.

Editor's Summary

Nscale's £2 billion Essex data centre faces a delay to the 2030s because of UK grid constraints, and Microsoft has withdrawn as its anchor tenant. The decision complicates Nscale's planned $35 billion flotation and comes as Gartner warns of large write-down risks if AI infrastructure spending does not generate adequate returns.