OpenAI Pauses UK AI Tech Team-Up With Nvidia Over Energy Costs, Regulation

OpenAI has paused its planned Stargate artificial intelligence infrastructure project in the United Kingdom, citing high energy costs and regulatory uncertainty, according to a report by CNBC that was confirmed by a company spokesperson.

The ChatGPT giant first announced the Stargate UK infrastructure project in mid-September 2025, in partnership with chipmaker Nvidia and infrastructure provider Nscale. The plan called for deploying up to 8,000 GPUs beginning in the first quarter of 2026, with the potential to scale to about 31,000 GPUs over time.

“Everything starts with compute,” OpenAI CEO Sam Altman said in a statement at the time. “Compute infrastructure will be the basis for the economy of the future, and we will utilize what we’re building with Nvidia to both create new AI breakthroughs and empower people and businesses with them at scale.”

The Stargate project had been expected to support local computing infrastructure for AI systems in the country. Proposed locations included sites such as Cobalt Park in northeast England, part of a designated “AI Growth Zone.”

A critical factor in the decision to halt the project stems from industrial electricity cost in the U.K., which averages about 24 pence per kilowatt-hour for medium-sized businesses—and AI data centers require far more power than typical industrial sites. Often, data centers run at 50–100 megawatts continuously, and more than 140 projects are already waiting for grid connections totaling over 50 gigawatts.

At current prices, operating a 100-megawatt data center could cost roughly $125 million to $250 million a year, highlighting the growing energy demands of AI infrastructure.

The Stargate U.K. project followed OpenAI’s July 2025 memorandum of understanding with the U.K. government, focused on adopting frontier AI systems in public services. It also comes months after the Trump administration announced a Stargate AI infrastructure initiative in January 2025.

While Altman and OpenAI have not made a public statement regarding the status of Stargate UK, OpenAI told CNBC it continues to evaluate the project and may proceed if conditions improve.

“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,” OpenAI said in a statement.

OpenAI did not immediately respond to a request for comment by Decrypt.