OpenAI has halted progress on its planned Stargate UK artificial intelligence (AI) infrastructure project, citing regulatory uncertainty and high energy costs as key barriers.
The initiative, unveiled during a state visit by Donald Trump to the UK in September, had been presented as a major boost to the country’s AI ambitions under UK Prime Minister Keir Starmer and Technology Secretary Liz Kendall.
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The pause marks a setback for government efforts to attract large-scale AI investment.
As part of the proposal, OpenAI had explored leasing up to 8,000 advanced chips from Nvidia in early 2026 through London-based data centre operator Nscale.
The capacity was expected to be deployed across several UK locations, including Cobalt Park in the North East of England.
However, the company has not proceeded with the chip leasing arrangement.
The decision highlights broader difficulties in expanding AI infrastructure in the UK under current cost and regulatory conditions.
A spokesperson told US news outlet POLITICO that OpenAI “continues to explore Stargate UK,” but will only move forward “when the right conditions such as regulation and the cost of energy enable long-term infrastructure investment”.
The company added that predictable frameworks, including rules around copyright, are central to its investment considerations.
The UK government recently withdrew proposals that would have permitted AI developers to use copyrighted material unless rights holders opted out, drawing criticism from the technology sector.
The report, citing sources, said OpenAI is continuing to engage with the government on public-sector AI use and plans to expand its research presence in London.
OpenAI and Nscale remain in commercial discussions, the report added.
The government has identified five “AI Growth Zones” across the UK, including in the North East of England, with support measures such as planning assistance, grid access and energy cost relief from 2027.
These projects are projected to be completed by 2030 and generate over 15,000 jobs.
Nonetheless, several sites – including those in Culham, Oxfordshire and North Wales – have yet to secure private investment partners, while timelines for other developments have been delayed.
Separately, a planned data centre project involving Microsoft and Nscale in Essex has been pushed back from 2026 to the second quarter of 2027, pending access to newer Nvidia chips and full planning approval.
