The OpenAI deal was part of a larger series of UK-US investments intended to ‘mainline AI’ into the British economy. Photograph: Dado Ruvić/ReutersView image in fullscreenThe OpenAI deal was part of a larger series of UK-US investments intended to ‘mainline AI’ into the British economy. Photograph: Dado Ruvić/ReutersOpenAI pulls out of landmark £31bn UK investmentArtificial intelligence company cites high energy costs and regulation as reasons for putting Stargate project on hold
OpenAI has put plans for a landmark project to strengthen the UK’s AI capabilities on hold, citing high energy costs and regulation.
Stargate UK was a part of the landmark UK-US AI deal announced last September, in which US companies appeared to commit £31bn to the UK’s tech sector, part of a larger series of investments intended to “mainline AI” into the British economy.
A Guardian investigation last month revealed many of these were “phantom investments” and a supercomputer scheduled to go live in 2026 was this March still a scaffolding yard in Essex. That supercomputer was to be built by Nscale, a UK firm that had never built a datacentre before but said it was aiming to deliver the project in 2027. Nscale was also to build key datacentres for Stargate UK.
The Stargate project was to support Britain in building out “sovereign compute” – infrastructure that would allow the government and other UK institutions to run AI models on datacentres in the country. This is in theory important to the security of British data, for both institutions and individuals.
An OpenAI spokesperson said: “We see huge potential for the UK’s AI future. 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.”
OpenAI’s exact commitments, under the Stargate project, were always vague. It was announced in September, during Donald Trump’s visit to the UK, and came as the Labour government sought to make AI and datacentres central to economic growth plans.
High energy costs, rising further because of the US-Israel war on Iran, stand to delay or derail AI datacentre projects worldwide. The UK’s industrial electricity prices were already the highest in Europe before the start of the war.
