Microsoft has withdrawn from a data-centre agreement with British cloud provider Nscale, according to The Telegraph newspaper, which adds uncertainty to the project due to delays in securing electricity supplies..
As per The Telegraph, Nscale has faced repeated delays, with national power grid officials informing the company that they do not expect to supply electricity to the data centre until the 2030s.
An Nscale spokesperson told Reuters that the company’s relationship with Microsoft remained strong and long-term, adding that the grid issue would not affect its other contracts.
“We remain committed to both the Loughton project and the UK, and we are exploring alternative power sources for the site, in addition to other expansion sites in the UK,” the official said.
The report’s timing was particularly unfortunate for Nscale, which has recently filed for an initial public offering (IPO) in the United States, with Microsoft and Anthropic anticipated to be its primary customers.
The company provides infrastructure for artificial intelligence (AI), including computing capacity, power, data centres and software used to train and run AI models.
Backed by Nvidia, Nscale competes with CoreWeave, Nebius, Crusoe and Lambda. The group has expanded rapidly since its launch, growing from USD 100 million to more than USD 103 billion in total contracted value in just two-and-a-half years.
Separately, Britain’s Competition and Markets Authority (CMA) has proposed designating Microsoft with “strategic market status” in business software, potentially allowing the regulator to intervene in how the company bundles products such as Excel, Teams and its Copilot AI assistant.
The CMA launched an investigation in May into whether Microsoft’s position in software used by around 20 million people a month in Britain was uncompetitive.
On Friday, the regulator said Microsoft held a strong position in personal computer operating systems and productivity, security, server and database management software. It also pointed to barriers customers faced when switching providers.
A Microsoft spokesperson said the company disagreed with the CMA’s assessment.
“All our products — including Copilot — are open and interoperable, giving customers the ability to use them alongside competing services,” the spokesperson said.
The CMA said it would examine whether customers could freely choose AI tools and whether competing providers could challenge Copilot. It would also investigate whether Microsoft’s bundling of security products restricted customer choice and how its licensing practices affected cloud options.
CMA Chief Executive Sarah Cardell said business software and cloud services supported workplaces throughout Britain, from small companies to essential public services.
“Organisations should be able to choose the products that work best for them, switch provider when they want to and combine services from different suppliers,” she said.
“We want to ensure businesses have the freedom to choose how they use Microsoft’s products alongside alternatives.”
The regulator will invite responses to the proposed designation before making a final decision by February.
If designated, Microsoft would become the third company subject to Britain’s new digital market powers. Alphabet-owned Google was designated in online search, while Google and Apple were designated in mobile platforms in October 2025.
In June this year, the CMA introduced new conduct requirements for Google’s search services, including allowing publishers to prevent their content from being used to power the American company’s AI features.
The requirements also called for greater transparency over how Google ranks search results.