OpenAI’s Stargate project in the UK has been paused, with the company citing energy costs and the country’s regulatory environment.
The US AI startup announced plans for a major infrastructure project in September, announcing it would deploy up to 8,000 GPUs in partnership with Nscale. Nvidia. Politico first reported Wednesday that the project was on hold.
“We continue to evaluate Stargate UK and will move forward when the right conditions, including regulatory and energy costs, allow for long-term infrastructure investment,” an OpenAI spokesperson told CNBC in a statement.
UK industrial energy prices are among the highest in the world. Critics of the UK’s AI infrastructure previously told CNBC that high energy costs and slow access to the national grid were major obstacles.
British lawmakers are also considering creating new regulations on how AI models can use copyrighted material.
Nscale declined to comment when contacted by CNBC about suspending the project. Nvidia has been contacted for comment.
OpenAI and Nscale are still in talks about future projects, a person with direct knowledge of the matter told CNBC.
stargate uk
At the time of its announcement, Stargate UK was seen as the driver of the country’s AI strategy. This follows OpenAI’s signing of a Memorandum of Understanding (MOU) with the UK Government in July 2025.
The project was expected to be rolled out across a number of locations, including Cobalt Park, which forms part of a newly designated AI growth zone in the Northeast, according to an OpenAI statement at the time.
The company aims to consider shipping up to 8,000 GPUs in the first quarter of 2026, with the potential to expand to 31,000 GPUs over time.
This capability allows OpenAI’s models to run on local computing power in specialized use cases such as critical public services and regulated industries such as finance and national security partnerships.
regulation
The UK plans to postpone changes to copyright rules that would have made it easier for AI companies to use media content, the Financial Times reported in March, following a backlash from the country’s creative sector.
Later that month, the government published a report on copyright and AI, which said the majority of respondents to the public consultation “rejected the consultation’s initial preferred proposal, namely a broad exception with an opt-out.”
“Many responses came from the creative industries, who were concerned that the broad exception would allow generative AI to directly compete and learn from their work without compensation,” the report said.
“We see great potential for the future of AI in the UK,” the OpenAI spokesperson added. “London is home to our largest international research hub and we support the Government’s ambition to be a leader in AI.”
“Meanwhile, we are investing in our talent and expanding our local presence, while also delivering on our commitments under our memorandum of understanding with the government to bring frontier AI to UK public services,” the statement continued.
— CNBC’s Arjun Kharpal also contributed to this report.
