OpenAI's Stargate UK project, touted as a multibillion-pound datacentre initiative, appears to have been largely hypothetical, with the company never visiting its key site in North Tyneside and £20bn of the £30bn investment claimed by the UK government uncommitted, according to a Guardian investigation.
Plans paused amid regulatory and energy concerns
The Stargate UK project was announced in September 2024 during US President Donald Trump's state visit to the UK, hailed as a major step in US-UK technology cooperation. However, in April 2025, OpenAI paused the plans, citing concerns over regulation and high energy costs. An OpenAI spokesperson told the Guardian: 'We see huge potential for the UK's AI future … 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.'
Key site never visited by OpenAI or Nscale
A freedom of information (FoI) request revealed that neither OpenAI nor its partner Nscale ever met with local authorities at Cobalt Park, the designated 'AI growth zone' in North Tyneside. Only Nvidia, another partner, visited the North East combined authority in February 2025, five months after the announcement. A source with knowledge of the process said: 'They needed a big announcement … Nscale were pretty much told to back the Stargate project, and it caught them completely unaware. It was never really a thing. It was effectively just a government PR stunt.'
Investment figures questioned
The government's press release stated the AI growth zone was 'set to' bring in £30bn in investment, with £10bn committed by Blackstone for a separate datacentre and 'potential for an additional £20bn in investment from future partners'. When asked how the £20bn figure was calculated, the government said it represented the amount needed to build a datacentre and utilise the site's 1.1GW electricity supply. Kamila Kingstone, senior campaigner at Spotlight on Corruption, said: 'It is disingenuous for the government to imply that the £20bn … will be forthcoming, when it reflects the amount needed. It will give false hope to communities.'
Local leaders surprised by announcement
John Johnsson, leader of the Conservatives in North Tyneside, said the announcement came as a surprise: 'When it was announced, we were really, really taken aback. We were surprised because we weren't made aware of any of these discussions. All of a sudden, there's all of this pizazz and these great big things announced.' He added that the site lacked grid connection and infrastructure, saying: 'The fundamentals, energy costs, grid capacity and infrastructure do not appear to have been in place to support a project of this scale.'
Government defends progress
A government spokesperson said: 'The government is determined to create the right conditions for investment in the UK's AI and datacentre infrastructure, and on the delivery of our AI growth zones, with work now well under way in the north-east. A dedicated taskforce co-chaired by the technology secretary and Kim McGuinness is driving forward planning, investment and skills for the region. The North East AI growth zone will increase its energy capacity to 1.1GW once fully operational, with over 400MW of this capacity to come online in 2028.'
