OpenAI, the maker of ChatGPT and an investor in large-scale AI infrastructure, has put its flagship UK data centre effort on hold, pointing to what it described as an adverse regulatory environment and prohibitive energy costs. The decision affects Stargate UK - a project announced last September in partnership with Nvidia and Nscale and supported by Microsoft - which the company said it will only restart when conditions permit long-term, sustained investment.
The Stargate UK initiative was unveiled as a "major step" in the technology partnership between the United Kingdom and the United States and was presented as a means to strengthen the country's sovereign compute capabilities while encouraging faster AI deployment across the UK. Sovereign compute refers to a nation's ability to develop and control its own AI infrastructure.
OpenAI has been expanding its global footprint in data centre infrastructure, collaborating with partners including Microsoft, Oracle and Nvidia to meet rising demand for AI compute. Despite that broader push, the company concluded the present mix of regulation and the cost of power in Britain does not yet support the type of long-term investment required for the project.
When asked about OpenAI's choice to pause the UK stage of Stargate, a government spokesperson said officials remain engaged with OpenAI and other leading AI firms "to strengthen UK compute capacity." The government comment indicates ongoing discussions but did not provide a timeline for resolving the issues OpenAI cited.
The project was launched last September and its announcement was timed to coincide with a high-profile US presidential visit to Britain, which the company tied to a broader wave of inward investment worth 150 billion pounds in total. OpenAI presented the initiative as central to developing Britain's independent computing resources for AI.
Prime Minister Keir Starmer, who opinion polls show trailing ahead of a national election due by 2029, has placed artificial intelligence at the heart of his economic growth strategy as a way to attract international capital and address sluggish economic performance. Last year, Starmer pledged a pro-innovation stance on regulation, together with proposals to make public data available to researchers and to designate zones for data centres.
Microsoft has previously criticised the UK regulatory approach as part of broader industry debate over how best to balance innovation and oversight. The article's reporting reiterates that regulatory clarity and energy pricing are the specific constraints OpenAI cited for pausing the UK project.
"We see huge potential for the UK’s AI future. London is home to our largest international research hub, and we support the Government’s ambition to be an AI leader," 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," the company added.
OpenAI's announcement represents a setback for the government's efforts to brand the UK as a global AI centre. It also underscores the practical constraints companies weigh when deploying energy-intensive compute capacity.
For reference, the article includes the exchange rate used in original reporting: $1 = 0.7458 pounds.
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