OpenAI pauses Stargate UK project over energy costs and regulation
OpenAI has paused plans to develop a major AI data centre project in the UK, citing high energy costs and regulatory uncertainty.
The US firm confirmed that its ‘Stargate UK’ infrastructure initiative, first announced in September, has been put on hold as it reassesses the conditions needed for long-term investment.
“We see huge potential for the UK’s AI future”, the company said in a statement on Thursday. “AI compute is foundational to that goal, we continue to explore Stargate UK and will move forward when the right conditions such as regulation and the cost of energy enable long-term infrastructure investment.”
The project had been expected to form a key part of the UK’s AI infrastructure ambitions, with plans to deploy up to 8,000 GPUs in partnership with Nscale and Nvidia. It was also designed with the potential to scale significantly over the next few years.
Stargate UK was set to be rolled out across multiple sites, including Cobalt Park in the North East, and aimed to provide local computing capacity for applications in public services and national security.
Setback for UK
The decision marks a setback for the government’s strategy to place the UK as a global hub for AI development, particularly in attracting large-scale data centre investment.
Industry figures have highlighted the UK’s high industrial electricity prices as a major obstacle, with power costs having become a critical factor in AI infrastructure, and large-scale model training and deployment requiring vast amounts of energy.
Delays in accessing the national grid have also been cited as a constraint, alongside a complex planning environment for major infrastructure projects.
Elsewhere, policymakers are currently reviewing rules around how AI companies can use copyrighted material to train models, following strong opposition from the creative industries to earlier proposals.
Despite the pause, OpenAI said it remains committed to the UK market, noting that London hosts its largest international research hub and that the company continues to invest in talent and partnerships.
Discussions with partners on the Stargate project are ongoing, with the company indicating it could revive the plans if conditions improve.