Microsoft cancels Nscale data centre contract at UK's Lawton site
Nscale says it will press on with the Essex project and review alternative power sources after Microsoft ended the capacity deal.
Microsoft has cancelled its data centre capacity contract with Nscale for a planned facility in Lawton, Essex, UK, according to aitimes.com. The UK-based AI cloud infrastructure company said it will continue the project despite the cancellation.
Microsoft did not disclose a specific reason for ending the deal. The Lawton project had been repeatedly delayed by problems connecting to the power grid, and the grid operator reportedly told Nscale it could not supply the required power until the 2030s.
Nscale said it is reviewing alternative power sources and other potential UK sites, and that its long-term relationship with Microsoft continues.
A conditional contract with Anthropic
Nscale's contract with Anthropic, worth $45 billion, is conditional and can be cancelled if Nscale misses funding or supply schedule milestones for its West Virginia data centre. In August, Anthropic signed the $45 billion deal to use computing capacity at that facility.
On the 18th of last month, Nscale submitted a listing registration to the US SEC, naming Microsoft and Anthropic as future major customers. In the first half of this year, one customer accounted for 52% of the company's total revenue.
The cancellation comes as other AI infrastructure firms face pressure. Australian company Firmus, backed by NVIDIA, cancelled its planned IPO due to insufficient investor demand, while CoreWeave saw its share and bond prices plunge amid heavy borrowing and additional funding needs.
Quick answers
Why did Microsoft cancel its Nscale contract?
Microsoft did not disclose a specific reason. The Lawton project had been repeatedly delayed by power grid connection problems, and the grid operator reportedly said it could not supply the needed power until the 2030s.
Will Nscale continue the Lawton data centre project?
Yes. Nscale said it will continue the Lawton project and is reviewing alternative power sources and other UK sites.
Is Nscale's contract with Anthropic affected?
The $45 billion contract is conditional and can be cancelled if Nscale misses funding or supply schedule milestones for its West Virginia data centre.