OpenAI has paused plans for a UK data centre, which would have formed part of its $500bn (£371bn) Stargate project, citing concerns about energy costs and regulation.
The company, which is best known for creating ChatGPT, announced its intention to build a data centre in the UK on 16 September 2025.
The project was called Stargate UK, and was described as “an AI infrastructure partnership with NVIDIA and Nscale that strengthens the UK’s sovereign compute capabilities”.
“Stargate UK ensures OpenAI’s world-leading AI models can run on local computing power in the UK, for the UK – particularly for specialist use cases where jurisdiction matters,” the company said.
On the same day, the UK Government put out a press release which referenced the project. It said: “OpenAI [will, during the first phase,] take up to 8,000 GPUs – computer chips which are the building blocks of AI technology, able to carry out a huge number of calculations in a split second – to support AI adoption across the UK early next year, with the possibility to expand to approximately 31,000 GPUs over time.”
It added: “Stargate UK is expected to be based across a number of sites in the UK, including Cobalt Park, which will form part of the newly designated AI Growth Zone in the North East.”
Speaking on 16 September 2025, OpenAI CEO Sam Altman 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 wider Stargate project was announced by OpenAI on 21 January 2025 and described as “a new company which intends to invest $500bn (£371bn) over the next four years building new AI infrastructure for OpenAI in the United States.
“We will begin deploying $100bn (£74bn) immediately. This infrastructure will secure American leadership in AI, create hundreds of thousands of American jobs, and generate massive economic benefit for the entire world.”
Pause announcement leaves space for optimism
On Thursday 9 April, OpenAI emailed a statement to journalists announcing its intention to pause Stargate UK.
“We see huge potential for the UK‘s AI future,” the company said.
“AI compute (the resources used to train AI models) 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.”
Energy costs in the UK are expected to rise soon due to the delayed impact of US and Israeli attacks against Iran, leading Iran to retaliate, in part, by effectively closing the Strait of Hormuz to tankers carrying oil and gas, which are flagged with the US or Israel, or other countries perceived to be supporting the attacks on Iran.
The Strait of Hormuz normally sees a significant proportion of global seaborne oil and gas traffic pass through it, and the closure has already pushed up the price of oil. The speed of tankers means the real impact of the limited supply will not be felt until weeks to come.
A UK Government spokesperson responded to OpenAI’s statement, saying: “Our focus is on continuing to create the right conditions for investment in the UK’s AI and data centre infrastructure.
“We are continuing to work with OpenAI and other leading AI companies to strengthen UK compute capacity.”
System-wide investment in UK energy network needed to unlock investment – civils leader
Responding to OpenAI’s decision to pause Stargate UK, Alan Thomson, Arup director of global strategic energy programmes, said: “Recent debate around delays to data centre development in the UK highlights a broader issue: timely access to affordable, reliable power is becoming a critical factor in investment decisions, particularly for energy-intensive sectors such as digital infrastructure and advanced manufacturing.
“In part this is due to the ‘marginal pricing’ system that means gas often sets the price of our electricity – even the portion that comes from renewables.
“There is no single solution. Reducing cost pressures and improving connection timelines will require a more strategic shift in how the electricity system is planned, built and operated, including expanding network capacity, accelerating domestic clean power, and improving how supply and demand are managed.”
He said “one of the clearest routes to lower and more stable costs over time is targeted, system-wide investment”.
“This includes new transmission infrastructure and substations, stronger local distribution networks, and digital tools that help manage the system more intelligently including accessing demand flexibility provided by data centres,” he said.
“Delivered at scale, these measures can reduce constraints, limit wasted energy and lower exposure to volatile global energy markets, helping create more competitive conditions for UK industry.”
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