In January last year, Nscale, an AI company whose board includes Nick Clegg and Sheryl Sandberg, announced that a supercomputer site in Loughton, Essex was ‘scheduled to be live in Q4 2026’.
Well, here we are, Q4 2026, and I am at the supercomputer site in Loughton, Essex. I don’t know what a ‘live’ supercomputer site is meant to look like, but I don’t think it is this: a barren canvas of rubble, enclosed by fencing, with weeds poking through the concrete. No one I ask has seen anything happen here, but a passer-by tells me he did see a digger once. The company has promised that the £2 billion investment will result in 250 jobs, but there seems to be just one at the moment: a man on his phone sitting in a VW Golf by the entrance.
It is almost two years since Keir Starmer promised to ‘mainline AI into the veins of the UK’. The hyperbole was no doubt meant to hammer home just how earnest, how effusive, how keenly felt the government’s techno-zealotry was. AI represented another opportunity for Britain to benefit from the newest frontier in global business – but a Labour government couldn’t admit that too baldly. Instead, the way to sell AI to a naturally sceptical public was to find homegrown success stories. In the government’s words: ‘We need companies at the frontier that will be our UK national champions.’
Nscale has been one of the most fêted. The government referred to it as ‘one of the UK’s leading AI companies’ in January last year, just eight months after it was formed and before it had filed any accounts with Companies House. Some eyebrows were raised. Computer Weekly, a diligent IT trade publication that did so much to uncover the Post Office Horizon scandal, said that the ‘high regard the government appears to hold [Nscale] in is curious to say the least’.
Nscale’s USP was that it was Britain’s ‘only full stack sovereign AI infrastructure provider’. ‘Full stack’ means that the company claims to be the opposite of a specialist: that it is able to secure electricity for data centres, build them, supply chips and offer software. In other words: do everything. It has always been quite the claim for such a new company, especially when you couple it with its promise to offer ‘sovereign’ power.
However, very little of Nscale’s operations seem particularly British. The majority of its directors are based overseas, with most of its data centre infrastructure thus far located in Norway. It opened a British office only in September last year: it’s on a floor of 16 New Burlington Place in Mayfair, a few storeys above the soap brand Aesop.
There’s plenty of cause for concern, and the British government risks looking gullible. It invited Nscale to meetings during Donald Trump’s state visit in September last year. British officials met American tech execs, such as Jensen Huang and Sam Altman, and Nscale, OpenAI and Nvidia announced a major data centre project for Britain on 16 September that year called ‘Stargate’ (it was halted earlier this year because of Britain’s high energy costs).
The company’s CEO is Josh Payne, a 32-year-old former coal miner from Australia. He’s received breathless write-ups in publications such as Time magazine, which said that ‘the barely two-year-old company is building data centres all over the world: above the Arctic Circle, on the windswept Portuguese coastline, and on the meandering banks of the Ohio River’. A recent New York Times profile noted that Payne got into the idea of entrepreneurship by reading books like The 4-Hour Workweek during breaks at the coal mine. He is the only director with ‘significant control’, since the company spun out of his previous business, Arkon Energy, which operated crypto mining facilities in Ohio and Norway.
Payne’s CV is interesting. There are gaps, and he briefly tried to flog protein supplements. Does he have an academic background in engineering? No. Does he have extensive business experience? Also no. But suddenly he’s managing billion-dollar data centre builds and has a direct personal relationship with Nvidia’s Jensen Huang.
The real-world results of Nscale’s promises have been mixed, to put it generously. It boasts of having $103.4 billion in customer contracts, but just $2.6 billion relates to infrastructure already up and running. Last month, Bloomberg reported that a flagship data centre project in Norway had descended into farce. Construction at the Glomfjord site is six months behind schedule after leaks in cooling systems and a fire. Nscale has had to book out most of the hotels in town to accommodate hundreds of construction workers brought in to rush things along, and has also towed in a three-storey floating hotel that had previously been used to detain migrants in the Netherlands.
Even more alarming is what’s been going on in West Virginia. Nscale hopes that the ‘Monarch Compute Campus’ will be the main driver of its future revenue, but that too has been chaotic. Anthropic signed a $45 billion deal to rent computing power from the first building, but Nscale admitted recently it hadn’t secured financing to build or equip it yet. The Financial Times reported last month that only 400 acres of the 2,250-acre site have been developed so far, and in July the company was issued with ten notices of violation for poor stormwater controls, with scientists blaming Nscale for flooding the local community ‘multiple times this year’. Nscale blamed extreme weather.
The West Virginia project is also now on track to become one of the largest sources of pollution in America. Despite the campus once being promoted as a ‘net zero’ hydropowered project, it will now be permitted to emit 271 tons of the cancer-causing chemical formaldehyde. At the campus, there will be up to 864 gas-fired engines spewing carcinogens into the environment, which presumably is not what Nick Clegg signed up for.
Of course, he and Sheryl Sandberg might not care. Their jobs seem to be to get the company ready for its IPO: Sandberg specifically has been brought in to help professionalise operations. She has a 0.25 per cent stake; Clegg has a 0.12 per cent stake, meaning he could make up to £30 million from its potential float. He has responded pugnaciously recently when asked about AI risks, characterising existential fears about AI as tech bosses ‘breathing their own fumes’.
Nscale’s main partner, Microsoft, pulled out of the Essex project last month after learning that it might not be hooked up to the electrical grid until the 2030s. Two weeks later, they stepped back from another partnership, deciding not to take up an option to double the size of a contract with Nscale linked to a data centre site in Texas. It seems implausible that such an established player as Microsoft would have been caught unawares by Britain or the US’s grid availability and energy prices. So you have to ask: why did it make the deals then? Cancelling two contracts with Nscale in quick succession sends quite the message. Is there something about the company’s operational manner that has caused Microsoft to take fright?
Losing Microsoft’s backing could be critical for Nscale: more than 40 per cent of its contracted revenue comes from partnerships with the company. Perhaps this is why Payne has had to send reassuring emails to his staff, telling them that demand remains ‘insatiable’ and signing off his emails ‘LFG’ (let’s fucking go). Jensen Huang recently recommended that Nscale ‘work around the clock’, and that they should ‘try less sleep, which is what I do’.
The AI minister, Kanishka Narayan, still wants to take credit for some of Nscale’s recent fundraising, saying that it occurred ‘in part as a result of the government’s support and convening’. He’s copying his predecessors: Peter Kyle, as science secretary, promoted its $2.5 billion investment days after a meeting with them in January last year, and his replacement, Liz Kendall, met Nscale chiefs within a month of taking over. Nscale, meanwhile, has hired from within government: in June last year, it recruited Imran Shafi, then director of AI opportunities at the Department for Science, Innovation and Technology, as chief strategy officer. He was barred by regulations from personally lobbying government for a year.
The government has gone to great lengths to encourage and hype up a company whose standing appears to be based on a bright future a long time from now. Nscale’s real-world performance thus far does not inspire much confidence: its progress to date is best illustrated by the towing of a migrant hotel up to the Arctic Circle, by West Virginian residents complaining about flooding, by an undeveloped industrial estate in Essex and the prospect of 864 engines spewing out formaldehyde.
One might expect Nscale to be grateful for the patronage and support it receives from Westminster. But when it filed for its initial public offering, it did so in New York.
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