OpenAI has halted plans for a major UK data centre project, citing high energy costs and regulatory hurdles as key barriers to investment. The ChatGPT developer had intended to establish its 'Stargate' data centre initiative within a new artificial intelligence growth zone in north-east England.
The venture was slated for multiple sites, including Cobalt Park near Newcastle and Blyth. However, the US tech giant said the plans are now on hold, awaiting 'the right conditions' to facilitate long-term infrastructure investment across the UK.
A spokesman for OpenAI said the company sees 'huge potential for the UK's AI future' and supports the Government's ambition to be an AI leader, but added that '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 reference to energy costs comes amid rising prices driven by geopolitical tensions. The International Monetary Fund noted in March that the UK is particularly exposed to soaring wholesale costs due to its reliance on gas-fired power. Data centres consume large amounts of energy, making them vulnerable to volatile prices.
Conservative MP and shadow science minister Ben Spencer said: 'When global firms cite high energy costs and regulatory uncertainty as reasons to walk away, it tells you everything about the direction of travel. For too long, Labour have prioritised courting big tech headlines while neglecting our domestic start-ups, but also the fundamentals that actually attract investment at home.'
