High energy costs and regulations: OpenAI pauses Stargate UK

OpenAI is putting its Stargate UK data center project in Great Britain on hold for the time being, as the framework conditions for its realization are not in place. The company cited regulatory hurdles and high energy costs as reasons for the surprising move. The US news portal Politico first reported on this on Wednesday.

The Stargate UK project was only announced by OpenAI in September of last year, coinciding with the state visit of US President Donald Trump to Great Britain. Even before that, the company had entered into a strategic partnership with the British government.

According to Politico, the plans for Stargate UK involved renting up to 8,000 advanced Nvidia chips from the London-based data center operator Nscale at various locations in Great Britain in the first quarter of 2026. OpenAI told the news portal that its investment decisions were based on various factors, including predictable regulations on issues such as copyright. Politico points out that the British government rejected earlier proposals last month to allow AI companies to use copyrighted content unless the rights holders explicitly object.

Setback for the British Government

According to Politico’s assessment, OpenAI’s move is “a major blow to the AI ambitions” of the British government. The government in London has made targeted efforts to attract investments from leading tech companies and infrastructure providers and has declared selected areas of the country as “AI growth zones.” At the same time, the country has some of the highest energy prices worldwide, making it difficult to attract energy-intensive AI data centers.

“Our focus remains on creating the right framework conditions for investment in the UK’s AI and data center infrastructure,” a spokesperson for the British Department for Science, Innovation and Technology said in a statement to the news agency Bloomberg. “We continue to work with OpenAI and other leading AI companies to strengthen computing capacity in Great Britain.”

OpenAI leaves the door open

OpenAI has not yet definitively abandoned the plans for Stargate UK. “We see enormous potential for the UK’s AI future,” the company said in an email to Bloomberg on Thursday. “AI computing power is the foundation for this goal. We are continuing to evaluate Stargate UK and will proceed with development once the framework conditions – such as regulatory requirements and energy costs – enable long-term infrastructure investments.”

OpenAI has increased its global investments in data center infrastructure. To meet the rapidly growing demand for AI computing power, the company is working with partners such as Microsoft, Oracle, and Nvidia. Stargate UK is the British arm of the international infrastructure project “Stargate Project,” under which OpenAI and its partners plan to invest at least 500 billion US dollars in new AI data centers in the coming years. This includes at locations in the US state of Texas, Norway, or the United Arab Emirates.

(akn)