OpenAI Freezes UK Stargate Project: Energy Costs and Copyright Rules Delay 8,000-GPU Plan
OpenAI is pausing its ambitious Stargate project in the United Kingdom. The US AI startup cites high energy costs and the regulatory environment as the main reasons for halting the infrastructure initiative announced in September. The project was planned in partnership with Nvidia and Nscale and was set to provide up to 8,000 GPUs.
“We continue to explore Stargate U.K. and will move forward when the right conditions such as regulation and the cost of energy enable long-term infrastructure investment,” a company spokesperson told CNBC. Industrial energy prices in the UK are among the highest in the world. Critics of British AI infrastructure had previously identified high energy costs and delays in accessing the electricity grid as key obstacles.
Copyright dispute puts the brakes on AI ambitions
Alongside high energy costs, uncertain copyright regulation is also causing hesitation. The UK is currently debating the conditions under which AI models may use copyrighted material. According to a Financial Times report from March, the government is delaying planned changes to copyright law following strong pushback from the creative industries.
A government report also published in March illustrates how sharp that criticism has been: the majority of respondents rejected the originally favored approach, which provided for a broad exception with an opt-out mechanism. Representatives of the creative industries in particular warned that such a rule would allow generative AI to use their works without compensation — and thus potentially enter into direct competition with them.
OpenAI still sees “huge potential”
The original Stargate UK project was considered a central pillar of the UK’s AI strategy. It emerged from a memorandum of understanding signed between OpenAI and the British government in July 2025. The plan was to launch with 8,000 GPUs in the first quarter of 2026 and scale capacity to 31,000 GPUs over the long term. The infrastructure was to span multiple sites, including Cobalt Park in the newly designated AI Growth Zone in the northeast of England. This would have allowed OpenAI to run models locally for critical public services, regulated sectors such as finance, and national security projects.
Despite the current pause, OpenAI is emphasizing its long-term commitment to the UK. A spokesperson stated: “We see huge potential for the U.K.’s AI future,” London already hosts the company’s largest international research center. “In the meantime, 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.”
According to a source familiar with the matter, OpenAI and UK AI infrastructure company Nscale are continuing discussions about a possible resumption of the project.
