[DigitalToday reporter Chi-gyu Hwang (황치규)] Microsoft has withdrawn from a data centre deal it was pursuing with British cloud company Nscale, Reuters reported on Oct. 18, citing the Telegraph.

Microsoft is one of Nscale's two biggest customers and recently terminated a contract for the Loughton data centre in Essex, the report said. The Telegraph did not say why Microsoft pulled out, but said Nscale's project had been delayed several times.

British power grid officials were reported to have told Nscale that power could not be supplied to the data centre it was pursuing until the 2030s.

An Nscale spokesperson told Reuters: "Our relationship with Microsoft remains robust and long-term." The spokesperson said: "Regrettable London-wide grid issues do not impact our other contracts." The spokesperson added: "We will continue the Loughton project and our UK business. We are seeking alternative power sources to use at the site, along with other expansion sites within the UK."

Nscale applied for an initial public offering in the United States last month. Its registration statement said Microsoft and Anthropic are expected to become key customers.

Nscale provides infrastructure such as computing, power and data centres, along with software for training and running AI models. It has received investment from Nvidia and is competing in the so-called neo-cloud market with CoreWeave, Nebius, Crusoe and Lambda. Within two and a half years of its launch, it has grown its total contract value from $100 million to more than $103 billion.