Planned UK Data Center Delayed Until 2030s Over Power Grid Delays. Microsoft Pulls Out
Published on 2026-10-18T22:08:00Z
July: Nvidia-backed Nscale is building a £2bn data centre at Loughton in Essex, with Microsoft signed up as its anchor tenant. But it can't get the electricity to switch on, reported The Next Web: Nscale's problem is not really Nscale's. It is Britain's. Grid-connection times have become the single biggest brake on new data centres. Some UK projects face waits stretching close to a decade for enough power. One estimate found more than a quarter of data-centre capacity slipped in 2025 alone. "The data centre was due to receive its power supply at the end of the year," reports the BBC. "But as first reported by the Telegraph on Sunday, Nscale has been told this will not happen until the 2030s." (Though Nscale and Microsoft are still working together on other projects in Norway, Portugal and America.) But now anchor-tenant Microsoft has pulled out of the Essex deal, reports the Telegraph, adding that Microsoft's move "leaves the site in apparent limbo. The company was its only announced customer, having agreed to rent 23,000 Nvidia AI chips at the facility..." Microsoft's decision threatens to undermine Nscale's attempts to push ahead with a Wall Street flotation worth up to $35bn (£26bn), despite a brutal sell-off in AI computing stocks. 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.... Tech analyst Gartner said last week that $3.5 trillion could be written off by 2030 if the AI boom fails to deliver on its promises. And "our research indicates that enterprise and consumer AI revenue will be insufficient to support profitable returns on all planned AI capital expenditures during this period," Gartner wrote: "In 2026, AI providers are expected to spend nearly $1 trillion on AI infrastructure, and are forecast to invest an additional $6 trillion between 2027 and 2030," said Will Sommer, Sr Director Analyst at Gartner.... Failure to achieve sustainable return on investment capital (ROIC) on rapidly depreciating assets would almost certainly necessitate write-downs. Based on Gartner projections, a continued AI infrastructure investment trajectory could leave more than $4 trillion in asset value exposed to write-down risk through 2032. In this 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. "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," said Sommer. By 2030, Gartner predicts that cost pressure and a lack of a differentiating business model will force over 80% of neocloud [AI-specialized infrastructure] providers to cease independent operations.
Published on 2026-10-18T22:08:00Z
July: Nvidia-backed Nscale is building a £2bn data centre at Loughton in Essex, with Microsoft signed up as its anchor tenant. But it can't get the electricity to switch on, reported The Next Web: Nscale's problem is not really Nscale's. It is Britain's. Grid-connection times have become the single biggest brake on new data centres. Some UK projects face waits stretching close to a decade for enough power. One estimate found more than a quarter of data-centre capacity slipped in 2025 alone. "The data centre was due to receive its power supply at the end of the year," reports the BBC. "But as first reported by the Telegraph on Sunday, Nscale has been told this will not happen until the 2030s." (Though Nscale and Microsoft are still working together on other projects in Norway, Portugal and America.) But now anchor-tenant Microsoft has pulled out of the Essex deal, reports the Telegraph, adding that Microsoft's move "leaves the site in apparent limbo. The company was its only announced customer, having agreed to rent 23,000 Nvidia AI chips at the facility..." Microsoft's decision threatens to undermine Nscale's attempts to push ahead with a Wall Street flotation worth up to $35bn (£26bn), despite a brutal sell-off in AI computing stocks. 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.... Tech analyst Gartner said last week that $3.5 trillion could be written off by 2030 if the AI boom fails to deliver on its promises. And "our research indicates that enterprise and consumer AI revenue will be insufficient to support profitable returns on all planned AI capital expenditures during this period," Gartner wrote: "In 2026, AI providers are expected to spend nearly $1 trillion on AI infrastructure, and are forecast to invest an additional $6 trillion between 2027 and 2030," said Will Sommer, Sr Director Analyst at Gartner.... Failure to achieve sustainable return on investment capital (ROIC) on rapidly depreciating assets would almost certainly necessitate write-downs. Based on Gartner projections, a continued AI infrastructure investment trajectory could leave more than $4 trillion in asset value exposed to write-down risk through 2032. In this 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. "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," said Sommer. By 2030, Gartner predicts that cost pressure and a lack of a differentiating business model will force over 80% of neocloud [AI-specialized infrastructure] providers to cease independent operations.
Read more of this story at Slashdot.
Comments
Post a Comment