Information Technology · Monday, 19 October 2026

01 Briefing what happened

Microsoft pulls out of Nscale's planned UK AI data centre in Essex, which cannot get a grid connection until the 2030s, weeks before Nscale's share sale

Nscale, a British builder of AI data centres, has lost the main customer for its Essex site, and some investors now say its shares are worth about half what it wants.

$16-19bn vs $30bn

what some investors say Nscale's shares would fetch, against what it has sought

they point to Firmus's failed share sale in Australia [3]

85%

of Nscale's contracts come from just two customers, Microsoft and Anthropic

Anthropic's deal alone is worth $45bn over six years [2]

6.4 of 30

megawatts running at Nscale's flagship site in Norway

the site is six months behind schedule [4]

2030s

the earliest the grid can fully power the Loughton site

it had been due to open next year [1]

The lead story — what happened

Microsoft has pulled out of a deal to be the main customer at Nscale's planned AI data centre in Loughton, Essex, the Guardian and The Next Web report, following the Telegraph. [1][2]
Nscale is a British company that builds data centres and rents the computers inside them to AI firms. It is backed by Nvidia, which makes the chips AI runs on. [1]
UK Power Networks, which runs the electricity grid in London and south-east England, told Nscale it cannot supply enough power to the site until the early to mid-2030s. [1]
The UK government had called Loughton the country's largest sovereign AI data centre in 2025, and it was due to open next year. [1]
Microsoft was the only customer Nscale had named for the site. Microsoft did not comment. [1][2]
Nscale says its relationship with Microsoft remains strong and that it is looking at other power sources and other UK sites. [1][2] The Guardian understands Microsoft stays a customer at Nscale's site in Norway. [1]
Nscale plans to sell shares in New York as soon as this month. Microsoft and Anthropic make up about 85% of its contracts, its filing says. [2]
Anthropic, the company behind the Claude AI assistant, agreed in August to spend $45bn on Nscale's computers over six years. [2]
Nscale's flagship site in Norway is six months behind after cooling leaks, a fire and building delays. Only 6.4 of its planned 30 megawatts are running. [4]
Nscale has been seeking a value of about $30bn. Some investors say $16-19bn would sell better, after Firmus, an Australian data-centre builder, called off its own share sale. [3]
CoreWeave, a US company that also rents out AI computers, saw its shares fall 25% last week, their worst week since November. [2]
Investors have also been lowering what they expect from share sales by Nscale and Anthropic, Moneycontrol reported on Monday. [5]

Running now in Norway6.4 MW

Planned in Norway30 MW

Nscale's flagship Norway site has about a fifth of its planned power running, six months behind schedule.

Who is involved

Nscale

a British company that builds AI data centres and rents out the computers; it has lost its main customer in Essex
Microsoft

the US software giant and one of Nscale's two biggest customers; it pulled out of the Essex site
UK Power Networks

the company that runs the grid in London and south-east England; it says full power comes in the 2030s
The UK government

Keir Starmer's government, which named the site its largest sovereign AI data centre in 2025

How it unfolded

2025 The UK government names Loughton its largest sovereign AI data centre [1]
March The Guardian finds the site is still a working scaffolding yard [1]
August Anthropic agrees to spend $45bn on Nscale's computers over six years [2]
This month The grid company says full power comes only in the early to mid-2030s [1]
18 Oct Microsoft pulls out, and investors push for a $16-19bn value [1][3]

Where this points

Watch whether Nscale keeps its New York share sale this month, and at what price: a value near $16-19bn rather than $30bn would show how far investors have moved. [3]

What is pushing on the whole day

The bar and the word are our reading of how hard each one is pushing today. The arrow is where it is heading. The evidence is in the stories below.

Investors cooling on AI builders High↑

Some investors say Nscale's shares would sell at $16-19bn, not the $30bn it wanted. [3] Shares in LTM, an Indian IT services firm, are down almost 30% this year. [29] A Citi banker warned that if the AI cycle turns in the US, Hong Kong's share sales will feel it too. [28]

Fights over where data centres go Building↑

Britain's grid cannot fully power Nscale's Essex site until the 2030s. [1] More than 300 local bans in the US have delayed only about three projects. [22] Data-centre groups now take their case to US schoolchildren. [23]

Gadgets that listen and watch Building↑

New AI wearables write summaries of conversations that bystanders never agreed to. [21] Swedish researchers spotted hidden guns using ordinary Wi-Fi signals. [25] An OpenAI engineer is charged with hiding a recording device in a meeting room. [13]

Apps shutting accounts by machine Building→

Instagram's security system shut the No Kings account after an AI tool read posts in fast bursts. [14] TikTok suspended the Musk film's advertising account, then called it an error. [17]

The rest of the day

18 more stories on this beat.

Each with its own sources. None of these is a link to the story above.

02
Anthropic pledges 5% of its shares to a fund

Anthropic said on Sunday it will put 5% of its shares into a new Public Benefit Fund, if its shareholders approve. [6] Its board may add 2% more for every 50% rise in the company's value above a level it has not disclosed. [6][8] The fund could give large donations to charities, pay money straight to groups of people, or work on AI's effect on jobs. [7][11] Its shares cannot be used for lobbying or political donations. [6] Business Insider puts 5% at about $48bn, at Anthropic's value in May. [10]

20 of 100
of every 100 Anthropic shares set aside for public purposes
About 20 of every 100 shares, counting the new fund and earlier pledges, as Anthropic tells it.

Why it matters — The pledge comes weeks before Anthropic's planned share sale, reported for November, and Anthropic says about 20% of its shares would then be set aside for public purposes. [8][6] It has not said who will choose what the fund pays for; that comes in the coming months. [7]
03
Samsung agrees to use TSMC for Nvidia memory

Samsung will use the 3-nanometre process of TSMC, the Taiwanese company that makes most of the world's advanced chips, to make the base die for Nvidia's next custom memory chips, a Seoul newspaper reported on Sunday. [12] These chips are high-bandwidth memory: stacks of memory that sit beside an AI chip, with a base die at the bottom that controls the stack. [12] Nvidia has asked the three big memory makers, Samsung, SK Hynix and Micron, to use TSMC, so its own memory controller sits inside. [12] It would be Samsung's first such work with TSMC. [12]

Why it matters — Samsung runs its own chip factories, and it accepted Nvidia's demand only after an internal review. [12] It will keep its own process for other customers and may make the part itself if TSMC runs short. [12] Nvidia says the design is meant to make memory from all three makers work the same way. [12]
04
OpenAI bugging suspect messaged a Saudi royal

US prosecutors said in a court filing on Sunday that Abdulrahman Alfozan messaged a member of Saudi Arabia's royal family often on WhatsApp. [13] Alfozan, an OpenAI engineer who has since been fired, is charged with hiding a recording device in an executive meeting room in San Francisco. [13] The filing says the royal tried to recruit him to a Saudi AI project. [13] It does not say the royal told him to plant the device. [13] Prosecutors say OpenAI executives met government officials in that room around the time the device was hidden. [13]

Why it matters — Prosecutors want him held without bail at a hearing on Monday, arguing a foreign government could help him flee. [13] His lawyer says nationality is not evidence of flight, and 54 people have written to the court in his support. [13]
05
Meta blames an AI tool for the No Kings shutdown

Meta explained on Sunday why Instagram shut the account of No Kings, a US protest network, for hours during its rallies on Saturday. [14] Its security systems saw a Claude tool reading profiles, posts and hashtags in bursts about four times the usual rate, and treated the account as a bot. [14] Claude is Anthropic's AI assistant. [6] An automatic re-check restored the account an hour later, but giving the organisers back their access took longer. [14]

Why it matters — No Kings says it held nearly 3,000 rallies to push early voting, and calls limiting talk about voting during an election unacceptable. [14] Chris Murphy, a US senator, called for an investigation. [14][15]
06
TikTok restores the Musk film's ad account

TikTok says it has restored the advertising account for Musk, Alex Gibney's documentary about Elon Musk, and calls the ban an error. [16][17] TikTok told the film's distributor on Friday, 16 October, that the account was being suspended. That was the day the film opened in many more US cinemas. [16][17] TikTok had first said the account kept breaking its rules on political posts. [17] Larry Ellison, a part-owner of TikTok's US business, appears in the film in a text offering to help Musk buy Twitter. [16]

Why it matters — YouTube and Meta had already reversed refusals to run the film's ads, calling them errors. X still has not allowed paid ads for the film. [16]
07
Disney offers jobs to most of Character.AI's staff

Disney has agreed to offer jobs to at least 60 staff of Character.AI, the chatbot app that filed for bankruptcy last week, a court filing shows. [18] That is most of the company, and the pay would cost about $60m a year. [18] Most of those offered jobs have said yes. [18] Disney had already agreed to buy some of Character.AI's assets for $20m. Its former boss, Karandeep Anand, is now Disney's first chief technology officer. [18]

Why it matters — Disney's bid is a first offer that another company can still beat with a higher one. [18] The filing says high costs, lawsuits and government inquiries over child safety held the app back. [18]
08
Trump says Google now does what he asks

At a rally in Kentucky on Saturday, Donald Trump said Google would not have taken his call in his first term, and that now they 'kiss my ass'. [19] He was talking about Google Maps showing his new names for the Gulf of Mexico and Lake Ontario. [19] Google has said it follows official US government sources for such names, under a long-standing policy. [19]

Why it matters — Tech companies and Google's boss, Sundar Pichai, have courted Trump in his second term with gifts, praise and donations, The Verge reports. [19] Trump's words suggest the change came from a personal call, not from Google's stated policy. [19]
09
Supreme Court weighs a video-privacy law

The US Supreme Court heard Salazar v. Paramount Global last Wednesday, and the justices seemed ready to side with Michael Salazar. [20] He says a Paramount sports website sent the videos he watched to Facebook, through a Meta tracking tool, without asking him. [20] His case rests on a 1988 law passed after a journalist published a US Supreme Court nominee's video-rental history. [20] Lower courts threw it out because he had only signed up for a newsletter. [20]

Why it matters — A win could open the way to lawsuits against many websites that track what people watch; Salazar's own class action seeks up to $2,500 a person. [20] Paramount's lawyer warned sites might hide videos behind consent screens; a ruling is due by next summer. [20]
10
Always-listening AI gadgets test wiretap laws

New AI gadgets from Apple, Amazon, Meta and start-ups listen all day and write summaries of conversations, CNBC reports. [21] Amazon's Bee Frontier and Bee Eclipse arrived on Thursday, and the Apple Watch Series 12 takes notes in the background. [21] Apple and Amazon say they do not keep the audio. [21] But many US state wiretap laws turn on whether a conversation was captured, not whether a recording was saved. [21]

Why it matters — In some states the legal risk may fall on the person wearing the device, not its maker. [21] A law professor says New Hampshire's law is broad enough to cover the Apple Watch feature, though prosecution is unlikely. [21]
11
US data-centre bans have delayed little

More than 300 local bans and pauses on new US data centres have delayed only about three projects, says SemiAnalysis, a research firm. [22] Those three add up to about 2.3 of the 21 gigawatts, a measure of power, planned inside areas with a ban. [22] Most pauses stop new applications but do not cancel approvals already given. [22] The firm still expects 38 gigawatts of US data-centre capacity in 2027, more than double 2026. [22]

Planned where bans apply21 GW
Likely to be delayed2.3 GW
Of the data-centre power planned in US areas with local bans, only about a tenth looks likely to be held up.

Why it matters — A state-wide pause would matter more: Texas has told its environment agency to issue no data-centre permits, and the agency's report to the governor is due on Monday. [22] A poll by the firm in August found more Americans dislike data centres than like them. [22]
12
Data-centre firms court schoolchildren

Data-centre companies and trade groups are taking their case into US schools, Wired reports. [23] One trade group gave flag-making kits and leaflets on the industry's positive impact to 3,100 first-graders in Loudoun County, Virginia, home to many data centres. [23] Another, 7x24 Exchange, offers colouring pages and children's books about data centres. [23] Wired counted at least eleven companies and groups that have taken students on trips to data centres since 2025. [23]

Why it matters — The push comes as local opposition to the buildings grows. [23] An education researcher told Wired that fast-food, tobacco and oil companies have used schools in the same way for a century. [23]
13
Woman arrested for blocking a delivery robot

Police in Philadelphia arrested Carolyn Marvin and charged her with disorderly conduct after she stood in front of an Uber delivery robot and refused to move. [24] She told a local TV station she blocks the robots because they take jobs from human delivery workers. [24] The robots have become common in the city's downtown, and one was kicked over earlier this year. [24]

Why it matters — It is a small, public sign of a wider worry that robots, robotaxis and AI agents are taking lower-paid jobs. [24]
14
Wi-Fi signals used to spot hidden guns

Researchers at the Swedish Defence Research Agency built an AI system, WiFireNet, that spots concealed handguns from the way they bend ordinary Wi-Fi signals. [25] They trained it on video and Wi-Fi readings of people carrying phones, a metal bottle, a plastic gun and a real one. [25] Their paper went online on 13 October and tested it on an old 1999 Wi-Fi standard. [25] The code, models and data are free for anyone to use. [25]

Why it matters — Wi-Fi sensing needs no cameras, which is why critics warn it could watch people with no rules in place. [25]
15
A fighter pilot commands a drone wingman

In a US Air Force test, an F-22 Raptor pilot gave combat orders to an Anduril YFQ-44A Fury, a drone that flies itself, The Defense Watch reported. [26] The drone turned the orders into tasks and moves on its own during the simulated fight. [26] The test is part of a programme to add drones to fighter squadrons, so that one pilot can lead several aircraft. [26]

Why it matters — The Air Force wants this because it costs less than putting a pilot in every jet. [26] The drones still have to be fitted into maintenance, weapons handling and supply before they reach front-line squadrons. [26]
16
DJI's dock swaps drone batteries in 25 seconds

DJI, the Chinese drone maker, has released the Dock 4, a box that swaps a landed drone's battery in about 25 seconds and sends it back up within 45. [27] It is meant for emergency services; charging the old way takes about 30 minutes. [27] Partners in China are taking orders for a kit at about $25,000. [27] It cannot be sold in the US: last December the FCC, the US communications regulator, put all foreign-made drones on a list that blocks new models. [27]

25 secBattery swap in the dock
30 minCharging the old way
The dock gets a drone flying again in seconds instead of half an hour, which is what matters for an emergency call.

Why it matters — Another FCC plan could pull older foreign drones and docks with heat or laser sensors from US sale, and DJI has sued the regulator. [27]
17
Chinese AI listings hold up, says Citi

Chinese companies that make AI hardware will keep selling shares in Hong Kong, even as US data-centre firms lose value, said Simon Yuan, Citi's head of China investment banking, on Friday. [28] He said about half the demand for these shares comes from inside China, and money from the mainland is a big buyer. [28] 118 companies listed in Hong Kong in the first nine months of this year, raising $49.4bn, up 106%. [28]

Why it matters — He warned that if the AI cycle turns in the US, Hong Kong will feel it too. [28] He expects next year's listings to shift from hardware to Chinese AI models and apps. [28]
18
India's LTM leans on short AI contracts

LTM, an Indian company that does IT work for other businesses, had promised faster growth but grew revenue just 1.1% from the quarter before. [29] Its AI revenue rose 40% from a year earlier, to 13.4% of the total, and it now takes more short AI projects of six to 12 months. [29] But new orders fell 25% from the quarter before, to $1.26bn. [29] Its shares fell over 1% on Monday and are down almost 30% this year. [29]

Why it matters — Short AI projects turn into revenue faster than big old contracts. [29] But LTM has not said how much of its new orders is yearly value and how much is whole-contract value, which makes future sales harder to judge, analysts at Nirmal Bang said. [29]
19
ICANN says it must work faster

ICANN, the non-profit that runs the internet's address system, opened its yearly meeting in Bali, Indonesia, on Monday. [31] Its chair, Tripti Sinha, said that ten years after the US government handed this job to ICANN, the address system has not split apart. [31] She warned that AI agents could change traffic on it, and could create more fake web addresses as well as help catch them. [31]

Why it matters — Its chief executive, Kurt Erik Lindqvist, said ICANN must turn agreed policy into working practice faster and more openly. [31]

02 Lesson why it matters

Why one failed share sale lowers the price of the next

Buyers cannot see inside a company that has never sold shares, so they price it by the last one like it, good news or bad.

The twist

Buyers cannot see inside a company that has never sold shares, so they price it by the last one like it. That is why Firmus failing in Australia cut what investors offer Nscale in New York.

The picture

$30bnWhat Nscale has sought

$16-19bnWhat some investors urge

Bloomberg says the investors pushing for the lower value point to Firmus, an Australian rival whose share sale collapsed.

How it works

A company selling shares for the first time has no market price yet
Buyers look at the nearest company like it that has tried to sell lately
Firmus, a similar data-centre builder, called off its share sale
So buyers offer Nscale less, whatever Nscale itself has done
One company's failed sale lowers the price for the next in line

The same force, elsewhere today

Where this chain is also running, in today's other stories.

Anthropic's share sale

Investors have been lowering what they expect for Anthropic's listing while worries about CoreWeave, another AI company, weigh on AI shares.
Disney's bid for Character.AI

Disney's offer is now the price any other bidder must beat, so the first offer sets the bar for everyone after it.

Where you've seen this

Selling a house

an estate agent prices it by what similar houses on the street sold for

Used cars

a price guide is built from what the same model fetched last month

Football transfers

one record fee for a striker lifts what every club asks for the next

The catch

It only works when buyers compare with the same companies: a Citi banker says Chinese AI listings in Hong Kong are holding up because about half their buyers are in mainland China.

And the whole of it

Firmus's investors in Australia and Nscale's in Britain never dealt with each other. A choice made by one group still changed what the other's shares are worth, and each could see only its own company.

03 Truth what's really going on

What is really going on

Nscale wants to sell its shares at about $30bn on the strength of two big customers and sites that are late or not yet built. [2][3][4] One of those customers, Microsoft, has now walked away from the Essex site because the grid cannot power it until the 2030s. [1] The same weekend Anthropic pledged 5% of its shares to a fund, weeks before its own share sale, while investors were already offering less for AI companies after Firmus's sale collapsed and CoreWeave's shares fell. [6][3][2]

Why it works on us — The UK government called Loughton its largest sovereign AI data centre, and a national label on one company's building makes its delay sound like the country's setback rather than a problem for a share sale. [1]

Who gains

Investors buying Nscale's shares now — Firmus's collapse lets them argue for $16-19bn instead of the $30bn Nscale wanted. [3]
TSMC — Nvidia has asked all three big memory makers to use TSMC's process for the base of its custom memory, and Samsung has agreed. [12]
Disney — It gets most of Character.AI's staff and some of its assets for $20m, as the first bidder in the bankruptcy. [18]
People suing over tracked video viewing in the US — If Michael Salazar wins at the US Supreme Court, more lawsuits could follow against sites that track viewing; his own class action seeks up to $2,500 a person. [20]
Chinese AI hardware companies listing in Hong Kong — About half the demand for their shares comes from inside China, so US data-centre falls reach them less, Citi's banker says. [28]

Who pays

Nscale's current backers — A value near $16-19bn rather than $30bn would shrink what their shares are worth at the sale. [3]
The UK government's AI plan — Its flagship sovereign AI site has no named customer and no full power until the early to mid-2030s. [1]
No Kings organisers — They were locked out of their Instagram account for hours during nearly 3,000 rallies to push early voting. [14]
People near an always-listening gadget — Their words can be summarised without their consent, and in some states the wearer, not the maker, may carry the legal risk. [21]
LTM's shareholders — New orders at the Indian IT firm fell 25% in a quarter, and its shares are down almost 30% this year. [29]

What nobody knows yet

Open questions from across today’s stories — ours included.

01

Why Microsoft walked away from Loughton.

The Telegraph, which first reported it, did not say why, and Microsoft did not comment. [2] Nscale blames a London-wide grid problem and says its other contracts are untouched. [1]
02

What Nscale is actually worth.

The Guardian gives a possible value of $35bn, Bloomberg says Nscale has sought about $30bn, and some investors say $16-19bn is more realistic. [1][3] No price has been set.
03

What Anthropic's 5% is worth.

Business Insider puts it at about $48bn using Anthropic's value in May. [10] The BBC says the share sale could value the company at more than $1tn, and a Bloomberg Opinion columnist says Anthropic is aiming for $2tn. [9][30] Each figure gives a different size for the fund.
04

Who will decide what Anthropic's fund pays for.

Anthropic says it will publish how the fund is run, and the value level that triggers more shares, in the coming months. [6][7] Shareholders have not yet approved it. [6]
05

Whether the Saudi royal had any part in the hidden device at OpenAI.

Prosecutors' filing says the royal tried to recruit Alfozan, but it does not say the royal told him to plant the device, and it does not name the royal. [13]
06

Who was running the Claude tool on the No Kings account, and why Meta's system read it as a bot.

Meta said only that a Claude tool read profiles and posts at about four times the usual rate. It did not say who ran it. [14]
07

Whether a gadget that writes a summary without keeping the audio breaks a wiretap law.

No court has answered it, and CNBC calls it a largely untested question under state wiretap laws. [21]
08

Whether Texas keeps its pause on data-centre permits.

The state environment agency's report to the governor is due on Monday, and a law firm expects the pause to last until mid-December. [22]

04 Hope carry this

Disney offered jobs to at least 60 people from Character.AI after the chatbot company went bankrupt, and most of them said yes.

Also true today

Ten years after the US government handed the internet's address system to ICANN, a non-profit, the system still works as one network across the world.