Global tech firm OpenAI pauses multi-billion North East venture

A global technology firm has paused plans for a multi-billion-pound North East data centre development.

OpenAI says it has halted the Stargate UK project over regulatory and energy cost concerns.

Unveiled last year, officials said the “historic” move would create thousands of jobs with OpenAI partnering with Nscale and NVIDIA to boost British artificial intelligence adoption.

Part of a wider £30 billion AI Growth Zone in the region, Nscale was set to make “thousands” of computer chips at Newcastle’s Cobalt Park business hub for use by OpenAI.

However, the ChatGPT maker says it has paused the project while it assesses market conditions.

In a widely reported statement, an OpenAI spokesperson said: “We see huge potential for the UK’s artificial intelligence future.

“London is home to our largest international research hub, and we support the Government's ambition to be an artificial intelligence leader.

“We continue to explore Stargate UK and will move forward when the right conditions, such as regulation and the cost of energy, enable long-term infrastructure investment.”

The Stargate UK project was revealed last year amid a wider AI Growth Zone plan.

Earmarked to complement Blackstone QTS’ previously-announced £10 billion data centre in Cambois, near Blyth, ministers said the AI Growth Zone would increase productivity across sectors including manufacturing, healthcare and energy, and deliver fresh breakthroughs in drug discovery, climate change and safer technology.

Speaking at the time, technology secretary Liz Kendall said: “The North East’s industrial legacy is evolving into a future of innovation, unlocking a potential £30 billion and powering communities with the skills and careers to lead the UK’s next industrial revolution.”

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