# Microsoft cancels deal to rent 23,000 Nvidia AI chips from Nscale in Essex

Digest AI · Business & Funding · published 2026-10-18T06:05:00Z

Canonical: https://digestai.news/story/microsoft-cancels-deal-to-rent-23-000-nvidia-ai-chips-from-nscale-in-e

## Summary

Microsoft withdrew from its agreement with Nscale to rent 23,000 Nvidia AI chips at the planned Essex data centre, leaving the project without its only announced anchor tenant. The cancellation follows repeated delays, with grid operators telling Nscale they do not expect a power supply until the 2030s.

The Essex site was highlighted by ministers as a showcase of the UK’s AI ambitions and formed part of the £22bn in UK investments Microsoft pledged last year during Donald Trump’s state visit. More than 40pc of Nscale’s $103bn contracted revenue comes from Microsoft, though the UK deal is believed to be a small part of that. Nscale, valued privately at $15bn and counting former Facebook executives Sheryl Sandberg and Sir Nick Clegg on its board, is seeking to raise billions of dollars in a float that could value it at more than twice that.

Analyst Gartner warned that $3.5tn could be written off by 2030 if the AI boom stalls, and Nscale has also faced delays at a flagship data centre in Norway, reportedly leading to heavy penalties. Australian rival Firmus cancelled a $20bn IPO earlier this month, underscoring market pressure on neocloud firms.

## Key points

- Microsoft cancelled its plan to rent 23,000 Nvidia AI chips from Nscale in Essex
- More than 40pc of Nscale’s $103bn contracted revenue comes from Microsoft, but the UK deal is a small part
- Nscale is privately valued at $15bn and is seeking a float that could value it at more than twice that

## Why it matters

The cancellation removes a key anchor tenant for a flagship UK AI data centre, raising doubts about the viability of large‑scale AI infrastructure projects in Europe.

## Sources

1. [Microsoft cancels its deal with Nscale to serve as the anchor tenant and rent 23K Nvidia AI chips at a planned data center facing repeated delays in Essex, UK](https://telegraph.co.uk/business/2026/10/18/microsoft-axes-ai-deal-setback-uk-data-centre-pioneer) (telegraph.co.uk, 2026-10-18)

## Cite

Digest AI, "Microsoft cancels deal to rent 23,000 Nvidia AI chips from Nscale in Essex", 18 October 2026, https://digestai.news/story/microsoft-cancels-deal-to-rent-23-000-nvidia-ai-chips-from-nscale-in-e

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