Microsoft pulls out of UK data center deal with Nscale, Telegraph reports

Oct 18 (Reuters) – Microsoft has pulled out of a data center deal with British cloud provider Nscale, Britain’s Telegraph newspaper reported on Sunday.

The US tech giant, one of Nscale’s two largest customers, recently terminated its agreement for the Loughton, Essex, data center, according to the report.

The newspaper did not specify why Microsoft withdrew from the project. Microsoft and Nscale did not immediately respond to Reuters requests for comment outside regular business hours.

Nscale filed for an initial public offering in the US last month, with Microsoft and Anthropic expected to be its major customers, according to its prospectus.

Nscale provides infrastructure, including compute, power and data centers, as well as software for training and running AI models.

The Nvidia-backed AI group, which competes against CoreWeave, Nebius, Crusoe and Lambda, has grown rapidly since its launch, scaling from $100 million to more than $103 billion in total contracted value in just two-and-a-half years.

(Reporting by Nethra Sailesh in Bengaluru; Editing by Joe Bavier)

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