OpenAI hits the brakes on Stargate UK infrastructure project, citing energy costs and regulatory concerns

OpenAI has paused plans for its Stargate UK project to build out AI infrastructure across the country.

In a statement given to ITPro, a spokesperson for the AI firm cited energy costs and regulatory concerns as a key factor behind the decision to pause the project.

“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 spokesperson said.

The spokesperson added that the company still sees “huge potential for the UK's AI future” and is continuing to invest in other schemes across the country.

In February, OpenAI announced plans to open its largest research hub outside the US in London. The move was described as a "huge vote of confidence" in the UK tech sector.

“We are investing in talent and expanding our local presence, while also delivering on the commitments under our MOU with the Government to adopt frontier AI in UK public services."

What is Stargate UK?

OpenAI announced the project in September 2025 as part of a collaboration with Nvidia and Nscale, detailing plans to initially deploy around 8,000 GPUs with the aim of scaling this to upwards of 30,000 in due course.

This was expected to form a core part of the UK’s efforts to build out infrastructure, with sites earmarked at Cobalt Park in the North East through the government’s AI Growth Zones initiative.

The project was hailed as a significant seal of approval for the UK tech sector at the time, as well as the Labour government’s ongoing plans to position the country as a global leader in AI.

OpenAI has other Stargate projects underway in both the US and Norway. In July last year, the firm announced a partnership with Nscale and Aker to build Europe’s first AI ‘gigafactory’ in Northern Norway.

Located in Kvandal, outside Narvik, the project marked the first AI data center initiative in Europe as part of its OpenAI for Countries scheme.

Last month, OpenAI and Oracle reportedly scrapped plans to expand a flagship AI data center in Abilene Texas.

According to reports from Bloomberg at the time, negotiations on the expansion ground to a halt amid financing concerns and increased capacity expectations.

It’s unclear whether the decision to pause Stargate UK will impact other national infrastructure projects, such as those in Norway.

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