OpenAI has suspended its "Stargate" project in the United Kingdom, citing concerns over regulatory policies and energy costs. The major artificial intelligence infrastructure initiative, announced in September 2025, was being developed in partnership with NVIDIA and Nscale.
A spokesperson for OpenAI stated that the company will resume the UK Stargate project once the regulatory landscape and energy expenses are conducive to long-term infrastructure investment.
The US-based AI startup revealed plans for the significant infrastructure project in September 2025, announcing collaboration with Nscale and NVIDIA to deploy up to 8,000 graphics processing units. Reports emerged on Wednesday indicating the project had been put on hold.
In a statement to CNBC, an OpenAI representative said: "We continue to evaluate the UK Stargate project and will move forward when conditions related to regulation and energy costs support long-term infrastructure investment."
The United Kingdom has some of the highest industrial energy prices globally. Critics of UK AI infrastructure development have previously told CNBC that expensive energy costs and delays in connecting to the national grid represent major obstacles.
UK legislators are also preparing new regulations governing the use of copyrighted content by AI models.
Nscale declined to comment to CNBC regarding the project suspension. CNBC also reached out to NVIDIA for comment.
A source familiar with the matter informed CNBC that OpenAI and Nscale remain in discussions about the project's future.
The Stargate project was initially viewed as a significant boost to the UK's artificial intelligence strategy when announced. This followed a memorandum of understanding signed between OpenAI and the UK government in July 2025.
OpenAI's original announcement indicated plans for multiple site developments, including the Cobalt Park site, which would fall within a newly designated AI growth zone in Northeast England.
The company had intended to complete deployment of up to 8,000 GPUs by the first quarter of 2026, with potential for gradual expansion to 31,000 units.
This computing capacity would have enabled OpenAI models to operate using local computational power, serving specific applications including critical public services, regulated sectors like finance, and national security cooperation.
According to a March report, the UK government considered delaying copyright law revisions following strong opposition from creative industries. The proposed changes would have lowered barriers for AI companies using media content.
Later that month, the government published a report on copyright and AI, noting that a significant majority of consultation respondents "rejected the approach we initially favoured during the consultation: a broad exception with an opt-out for rights holders."
The report stated: "Substantial feedback came from the creative industries, who expressed concern that a broad exception would allow generative AI to be trained on their work without permission and then compete with them directly."
The OpenAI spokesperson added: "We remain optimistic about the significant potential of the UK's AI sector. London hosts our largest international research center, and we support the government's ambition to become a leader in artificial intelligence."
The statement continued: "Meanwhile, we are increasing our talent investments and expanding our local presence while fulfilling commitments under our memorandum of understanding with the UK government to apply cutting-edge AI technology to public services."
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