OpenAI says it will be pausing its data centre project in the UK, blaming an “unfavourable regulatory environment” and high energy costs.
The multi-billion pound Stargate UK project included a data centre in the North East’s AI Growth Zone, in Cobalt Park, near Newcastle.
The partnership between OpenAI, Nvidia and Nscale was announced by the government in September, as a $30bn international investment, creating 5000 high-skilled jobs.
However, now Microsoft-backed OpenAI said that it would only proceed once conditions were in place “to support sustained, long-term investment”.
It’s a major change from a few months ago, when Sam Altman, CEO of OpenAI, said: “The UK has been a longstanding pioneer of AI, and is now home to world-class researchers, millions of ChatGPT users, and a government that quickly recognised the potential of this technology. Stargate UK builds on this foundation to help accelerate scientific breakthroughs, improve productivity, and drive economic growth.
“This partnership reflects our shared vision that with the right infrastructure in place, AI can expand opportunity for people and businesses across the UK.”
The data centre could have the capacity to scale to 31,000 GPUs over time, in order to provide sovereign AI capabilities – for critical public services and sectors for finance and national security.
A spokesperson for OpenAI said: “We see huge potential for the UK’s AI future […] 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.”
And as of 15 April, a spokesperson for the North East Combined Authority made reassurances that the North East remains one of the UK’s designated AI Growth Zones.
“It is disappointing news that this is on hold, but it reflects national challenges around energy pricing and regulatory certainty rather than the strength or ambition of our region. However, we will continue to work with government to explore ways to remove the barriers and ensure this can move forward.
“The North East remains one of the UK’s designated AI Growth Zones, with strong assets in power, land, skills and applied innovation, and our direction has not changed. We remain open for business and focused on securing investment, jobs and long‑term growth for local people.”
