The exit follows news that UK Power Networks, which owns and maintains the electricity grid across London and the south-east of England, told Nscale it could not supply enough power to the site until the early to mid-2030s. The Guardian had earlier reported that the location was still an operational scaffolding yard, and a month ago it emerged the power problems would mean a lengthy wait before the datacentre could come online.

Nscale, an Nvidia-backed "neocloud" chosen alongside CoreWeave as a key player in the government's sovereign AI push, says it remains committed to the project and is exploring onsite power generation and ways to speed up the grid connection. It stresses that the "London-wide grid issue" has no impact on its other contracts, and Microsoft is understood to remain involved in an Nscale project in Norway.

The loss of its expected anchor tenant could complicate Nscale's ambition to float on Wall Street this year at a potential valuation of $35bn. The company counts Nick Clegg and former Meta executive Sheryl Sandberg among its board members, with Clegg's 0.25% stake worth about $88m at that valuation.