OpenAI’s much-touted plans to build a major data center in north-east England have stalled, representing a major blow to Sir Keir Starmer’s strategy to put artificial intelligence at the heart of Britain’s economic growth.
The maker of ChatGPT announced last September that it would bring its Stargate program, a global data center initiative initially valued at $500 billion (£378 billion), to British shores through a partnership with Nscale, the U.K.-based data center operator. The original plan was to house around 8,000 Nvidia AI processors at Cobalt Park on Tyneside in the first quarter of 2026. That deadline has now passed without a groundbreaking, and OpenAI has declined to offer a revised timeline.
The reasons for the delay remain unclear, but it is understood that trade negotiations between the parties are continuing. Both OpenAI and Nscale declined to comment on the state of affairs.
The Stargate concept was first introduced by OpenAI CEO Sam Altman at a White House press conference in January 2025 alongside Donald Trump. Altman then promised to expand the program internationally, with Britain as a key location. In a government press release at the time, he described Stargate UK as part of a “shared vision” to expand opportunities through the right infrastructure.
The project was greeted with enthusiasm by ministers who wanted to position the UK as a global leader in AI. OpenAI also signaled its commitment to the UK by appointing George Osborne, the former Conservative chancellor, to lead its international expansion.
But the setback in Tyneside is not an isolated incident. In the United States, negotiations over Stargate’s broader rollout have progressed slowly, with key backer SoftBank, among others, yet to set final terms. A planned expansion of a major site in Texas, being developed jointly with American data giant Oracle, was quietly shelved earlier this year.
The entire industry is struggling with similar problems. Tech companies have collectively committed to spending hundreds of billions of dollars on data centers to meet rising demand for AI applications, but deployment is proving far more difficult than the headlines suggest. Research from Sightline Climate shows that up to half of all large data center projects are now behind schedule, hampered by planning difficulties and energy supply constraints.
Nscale, which is valued at $15 billion and whose board members include Sir Nick Clegg, the former deputy prime minister, was itself forced to push back the schedule on a separate project in Loughton, Essex, Daily Sparkz reported last week.
Critics quickly recognized the lack of progress. Tom Hegarty, a spokesman for Foxglove, the campaign group that has raised concerns about the environmental impact of the data center boom, said the Stargate UK project was little more than a press release issued eight months ago.
The government stressed that it remains focused on creating the right conditions for investments. A spokesman said ministers would continue to work with OpenAI and other leading AI companies to strengthen the UK’s computing capacity. Whether that reassurance will be enough to dispel growing skepticism about the pace of delivery is another question entirely.
