OpenAI has paused plans for a multi-billion-pound UK data centre project aimed at expanding its AI infrastructure, citing concerns over high energy costs and regulatory uncertainty.
The initiative, known as Stargate UK, included proposals for a major data centre in north-east England and the deployment of thousands of high-performance chips in partnership with Nvidia and Nscale.
The project formed part of a broader £31bn package of technology investment, previously highlighted as a key step in positioning the UK as an “AI superpower.”
However, OpenAI said it will only proceed when the “right conditions” are in place to support long-term infrastructure investment. The company pointed specifically to the need for more favourable energy pricing and regulatory clarity.
“We see huge potential for the UK’s AI future,” a spokesperson said, noting that London hosts its largest international research hub. “AI compute is foundational to that goal — we will move forward when conditions such as regulation and energy costs support long-term investment.”
When originally announced, Stargate UK was intended to strengthen the country’s “sovereign compute capabilities” and support domestic AI development, contributing to economic growth and global competitiveness.
The planned facility at Cobalt Park was significantly smaller than OpenAI’s U.S.-based Stargate project, which involves a $500bn investment over four years to build large-scale AI infrastructure.
The pause is seen as a setback for the UK government, which has been actively promoting investment in AI and technology as a driver of future economic growth.
