OpenAI has said that rising UK energy costs were behind the company’s decision to row back on its commitment to build a key data centre in Northeast England.
The company, best known for its ChatGPT large language model, last year announced that it was taking part in Stargate UK, an AI infrastructure partnership with NVIDIA and Nscale to strengthen the UK’s compute capabilities.
According to announcements made at the time, a key part of Stargate UK was plans to build a new data centre at Cobalt Park in North Tyneside, which was expected to form part of a newly designated AI Growth Zone in the North East.
As part of the project, Open AI said it would explore leasing up to 8,000 GPUs in Q1 2026, with the potential to scale up to 31,000 GPUs over time.
However, last week OpenAI emailed a statement to journalists announcing its intention to pause Stargate UK.
“AI compute (the resources used to train AI models) is foundational to that goal [of building the UK’s AI future],” OpenAI said.
“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 in the near term due to the delayed impact of US and Israeli strikes on Iran, which have prompted a wider regional escalation.
The news comes as a blow to the UK government which signed the Stargate UK agreement as part of a wider £31 billion deal with a handful of US based Tech companies to coincide with President Donald Trump’s state visit to the UK last year.
The agreement, designed to deepen collaboration on emerging technologies, including AI, quantum computing and civil nuclear energy, was suspended by Washington officials in December.
