Nscale's IPO plans hit another snag: Microsoft exits data center project

On October 18, citing The Daily Telegraph, Microsoft (MSFT.O) has withdrawn from a data center partnership with UK-based emerging cloud service provider Nscale in Loughton, Essex, England. The move comes at a critical time as Nscale prepares for its IPO, adding another variable to the startup's listing plans.

The report said Microsoft did not specify the reason for terminating the partnership, but the project has faced a series of delays. Local authorities have informed Nscale that power for the facility is not expected to be available until the 2030s. In addition, Nscale's flagship project in Norway is about six months behind schedule, with only 6.4 MW of the planned 30 MW data center currently in operation.

According to Nscale's IPO filing, about 85% of the company's contracts depend on Microsoft and Anthropic. Microsoft had originally planned to become the anchor tenant of Nscale's first UK data center in Essex. Microsoft's exit will be a blow to Nscale, which is seeking to raise up to $3 billion through an IPO that could take place as early as this month.