AI Capex Reassessment: Microsoft Exits UK's Largest AI Data Center as Tech Selloff Bites
Microsoft pulled out of Britain's flagship AI data center over power-supply concerns, adding to a week of doubt about AI spending that triggered a tech selloff and dragged risk assets lower.
Microsoft has withdrawn from a flagship AI data center project in Britain over power-supply concerns, according to the Financial Times. The Essex site, developed by Nscale and billed as the UK's largest AI data center, had Microsoft as its only publicly announced customer; it remains largely unbuilt.
The exit lands amid a broader reassessment of AI capital spending. Global tech shares fell sharply last week on doubts about the return on AI investment, with bargain hunters only tentatively returning this week. Bitcoin's 21-day correlation with the Nasdaq-100 has climbed to 0.67, showing how tightly digital assets are now tied to the tech complex.
Power has emerged as the binding constraint on the AI buildout. Utilities in multiple regions report interconnection queues of five to seven years, and hyperscalers are increasingly signing long-term power purchase agreements or exploring dedicated generation. When the marginal data center cannot get electricity, the marginal dollar of AI capex cannot be spent.
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