Sir Keir Starmer’s pledge to forge Britain into an artificial intelligence “superpower” has suffered its most embarrassing setback to date, after OpenAI quietly shelved its flagship Stargate UK data centre project, pointing the finger squarely at ruinous industrial energy prices and a muddled copyright regime.
The ChatGPT developer confirmed on Thursday that it was pausing the scheme, which had been unveiled with considerable fanfare last September during President Trump’s state visit. Stargate UK was meant to be the crown jewel in a £31 billion package of American technology commitments that also included £22 billion from Microsoft and £5 billion from Google. OpenAI, tellingly, never put a figure on its own pledge.
Built in partnership with chip giant Nvidia and London-based Nscale, the project was sold to ministers as a “major step” towards building sovereign British compute capacity, initially deploying some 8,000 graphics processing units in the first quarter of this year and scaling to roughly 31,000 chips thereafter. Sam Altman (pictured), OpenAI’s chief executive, had talked up its potential to turbocharge scientific research, lift productivity and juice economic growth, the very metrics the Labour government has staked its credibility on.
For the hundreds of thousands of small and mid-sized British firms eyeing AI as a route to efficiency and competitiveness, the climbdown is more than symbolic. Without domestic compute power at scale, SMEs risk being pushed further down the queue behind American and European rivals who can plug into cheaper, closer infrastructure.
Sam Richards, chief executive of the pro-infrastructure campaign group Britain Remade, did not mince his words. He described the pause as “a stark warning” that Britain was becoming prohibitively expensive to build in, arguing that no country saddled with some of the developed world’s steepest industrial electricity tariffs could credibly call itself an AI superpower. Investors, he warned, would simply take their chequebooks elsewhere.
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