OpenAI Puts UK AI Investment on Hold Citing High Energy Costs

OpenAI has put on hold plans for a landmark UK investment, Stargate UK, citing high energy costs and regulation, in a blow to the government which has put AI at the centre of its growth strategy.

The Stargate project was part of the UK-US AI deal announced last September, in which US companies appeared to commit £31bn to the UK’s tech sector. The project aimed to support Britain in building out “sovereign compute” – infrastructure that would allow the government and other UK institutions to run AI models on datacentres in the country.

Victoria Collins MP, the Liberal Democrat spokesperson for science, innovation and technology, said: “This is a wake-up call for the government to manage energy costs in the UK and foundation infrastructure.”

The Labour MP Clive Lewis said: “When a government has no economic strategy worthy of the name and no real industrial vision, it becomes vulnerable.”

An OpenAI spokesperson said: “We see huge potential for the UK’s AI future, and we support the government’s ambition to be an AI leader. We continue to explore Stargate UK.”

High energy costs, rising further because of the US-Israel war on Iran, are expected to delay or derail AI datacentre projects worldwide. The UK’s industrial electricity prices were already the highest in Europe before the start of the war.