Bitcoin mining offshoot Nscale loses Microsoft AI deal as power delay stretches into 2030s

Technology giant Microsoft has walked away from a planned AI data center in England run by Nscale, a company spun out of bitcoin mining, after the local grid operator said it may not be able to power the site until the early-to-mid 2030s.

The site in Loughton, Essex, was meant to house 23,040 Nvidia chips and supply 50 megawatts of computing to Microsoft’s Azure cloud by early 2027, according to the Guardian, which followed initial reporting by the Financial Times. UK Power Networks, which runs the local grid, told Nscale enough capacity may not be available for roughly another decade.

Nscale announced the project last year alongside Microsoft, Nvidia and OpenAI. When the Guardian visited in February, the site was still a working scaffolding yard. Nscale has since cleared it and is looking at other ways to bring in power. It said its other Microsoft contracts remain in place.

Nscale grew out of Arkon Energy, which built sites for bitcoin mining. Its founder, Josh Payne, took that experience in locking down land and power and turned it into a business selling computing to AI companies. Much of the listed mining industry is now running that playbook.

When CoinDesk looked at the shift in March, public miners had announced more than $70 billion in AI and high-performance computing contracts. They had also cut their combined bitcoin holdings by more than 15,000 BTC from their peaks, partly by selling coins to pay for the buildout.

Mining was already getting squeezed then. The report put the average listed miner’s cash cost to produce one bitcoin near $80,000 in the fourth quarter of 2025, and bitcoin was trading around $70,000 by March.

AI contracts pay steadily for years, but the sites cost far more to build. Estimates suggest an AI-ready facility runs $8 million to $15 million per megawatt, compared with roughly $700,000 to $1 million for bitcoin mining, and AI customers expect the servers to stay up around the clock.

The money also takes time to show up. In its latest mining report, fund manager CoinShares counted more than 4 gigawatts of AI capacity under contract across the miners it tracks, with only about 550 megawatts actually billing customers. Their contract backlogs topped $100 billion, while annualized AI revenue stood at just over $1 billion.

As such, unless Nscale finds its own power or gets the grid to move a lot faster, the site it just cleared could sit idle for years.