As widely reported (see here for example), OpenAI is pausing its multi-billion-dollar Stargate UK project. The project was first announced in September 2025 with the declared purpose of ensuring ‘OpenAI’s world leading AI models can run on local computing power in the UK, for UK – particularly for specialist use cases where jurisdiction matters. This will help power the UK’s future economy, boost its global competitiveness, and deliver on the countries national AI Opportunities Action Plan’. The UK government’s AI Opportunities Action Plan had been announced in January 2025 as a focus for ramping up AI adoption to boost economic growth, jobs, and improvements to people’s everyday lives. A year later, in January 2026, a seemingly positive progress update was published. The government’s thus likely to be wringing its hands about OpenAI’s pause. Why? Because it puts a dent in the country’s desire to be an ‘AI superpower’, especially when the company asserts that regulation and high energy costs are obstacles. The Stargate UK pause, however, is hardly a surprise given that the holistic situation faced by OpenAI today is really no different to when the project was announced last September.
OpenAI announced the project on the date President Trump started his state visit to the UK. With tariffs as a backdrop, the pressure on the UK government to make the visit a success was huge, and a centrepiece during the visit was the signing of a technology partnership involving new investment and cooperation on AI. Domestically, the government needed this to promote its growth agenda, but a ‘technology partnership’ and tangible realities are different. Given the pressure for the visit to be a success, OpenAI’s Stargate UK announcement was part of an overall joint PR strategy – at least that’s what the Badger senses. At that time, the UK had some of the highest costs for electricity in the world, and that’s still the same today! If there’s one thing an aspirant AI superpower needs, it’s economically competitive electricity and so it can hardly be a surprise when a commercial company focused ‘on the business case and numbers’ decides to hold off further investment. Additionally, there’s uncertainty about changes to UK law to allow AI firms to train their systems using copyrighted works, ongoing investor anxiety about an AI bubble, the fact that OpenAI hasn’t delivered a profit yet and is forecast to make losses of ~$44 billion before becoming profitable in 2029, and that OpenAI is facing massive competition from Google (and others) which is raising significant questions about its future. All of these points were material when Stargate UK was announced 7 months ago, and they remain so today.
A sceptic could thus be excused for thinking that the project was driven by a geopolitical public relations necessity in the first place. For the Badger, with his instincts rattling from experience, it’s thus hardly a surprise that Stargate UK is paused…
The Information Badger 