OpenAI is pausing its Stargate AI infrastructure project in the UK in a blow to the government and data centre builder Nscale which was partnering with the US giant on the plan, alongside Nvidia.
The San Francisco-based company cited concerns over energy costs and regulation. “We see huge potential for the UK’s AI future,” it said on Thursday.
The UK project, which was announced in September, is part of a larger OpenAI plan to grow its global data centre footprint to deploy and train its AI models. Other Stargate projects are underway in the US, Norway and UAE.
Nscale, which raised a record-breaking $2bn Series C last month, is part of a cohort of ‘neoclouds’ — young companies responding to the huge uptick in demand for compute, triggered by the AI boom, by building data centres.
Announcing the partnership with OpenAI and Nvidia back in September 2025, Nscale said it would “explore offtake of up to 8k Nvidia GPUs in Q1 2026”, with a potential to scale to 31k. The London-based company declined to share an update on whether the deal had been finalised with Sifted last month.
Nscale declined to comment.
The project was launched by the UK government during US president Donald Trump’s state visit to the country. Also announced in the raft of measures was an $18bn commitment from AI Pathfinder, a company which had its assets frozen by the high court earlier this year.
Stargate UK was based across a number of data centre sites in the UK, including in Cobalt Park in the North East.
A spokesperson for the UK government tells Sifted that it continues “to work with OpenAI and other leading AI companies to strengthen UK compute capacity,” adding its focus “is on continuing to create the right conditions for investment in the UK’s AI and data centre infrastructure.”
