Microsoft pulls out of Nscale deal

Good morning,

Over the weekend, Microsoft pulled out of a deal with Nscale to build the UK’s largest AI data centre. The Redmond-based tech behemoth had been lined up as the supplier of a super computer at the site in Essex, in a project hailed last year by then-PM Sir Keir Starmer as central to Britain’s AI strategy.

Meanwhile, profit warnings for London listed businesses are at their highest level for two years - up to 65. That’s thanks in large part to the energy price shock brought on by the war in Iran.

We’re looking at a modest dip for the FTSE 100 this morning, while oil prices are stubbornly high at $108 a barrel.

So, here’s everything you need to know this morning. We’ll be back in your inbox at noon with Midday Markets.

Matt

Plans were first announced last year, with Nscale pledging £2bn to build and open a pioneering facility in Loughton, Essex. The government hailed the agreement at the time with former Prime Minister Sir Keir Starmer highlighting the project in the UK’s AI strategy in 2025.

But concerns surrounding power supplies has led to Microsoft, which was being viewed as the anchor tenant for the centre, pulling the plug on its end of the deal.

Asian stock markets mostly dropped on Monday following continued jitters over AI funding needs. A fall in oil prices ‌also offered some reprieved to the bond markets, helping to limit some losses in Asia.

Oil dropped after Donald Trump waived some sanctions on Russia, though Brent crude remained stubbornly high over $108 per barrel after a hefty weekly gain last week.

Profit warnings are announcements to shareholders informing them that initial market forecasts on profit or earnings will not be met.

Over half of companies blamed the rise on geopolitical uncertainty, with 38 per cent citing the impact of the ongoing conflict in the Middle East.

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The Prime Minister has encouraged councils to use new powers to crack down on loud music, littering, vaping and threatening behaviour on public transport. 

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