OpenAI’s plans to establish a major data centre in north-east England have stalled, marking a setback for the UK government’s strategy to position artificial intelligence at the centre of economic growth. The company, best known for its ChatGPT platform, had announced in September that its Stargate programme, a global data centre initiative valued at $500 billion (£378 billion), would come to Britain through a partnership with UK-based operator Nscale.
The Tyneside site at Cobalt Park was expected to house around 8,000 Nvidia AI processors by the first quarter of 2026. That deadline has now passed with no construction underway, and OpenAI has not provided a revised timeline for the project. Both OpenAI and Nscale declined to comment on the current status of the development.
The Stargate programme was first unveiled by OpenAI CEO Sam Altman in January 2025 at a White House press briefing with then-President Donald Trump. Altman described the UK as a key international location for the project, with the aim of expanding AI infrastructure and economic opportunity. The government quickly embraced the plan, seeing it as a cornerstone of Britain’s ambition to become a global AI leader. OpenAI further signalled its commitment to the UK by appointing former Conservative chancellor George Osborne to lead its international expansion.
Delays in Tyneside echo broader challenges for Stargate internationally. In the US, key projects have been slow to progress, with a planned expansion in Texas, in partnership with Oracle, quietly shelved earlier this year. Industry research from Sightline Climate shows that nearly half of large-scale data centre projects worldwide are now behind schedule, hindered by planning hurdles and energy supply constraints.
Nscale itself, valued at $15 billion and counting former deputy prime minister Nick Clegg among its board members, recently postponed a separate development in Loughton, Essex. The cumulative delays have drawn criticism from campaign groups and observers. Tom Hegarty of Foxglove, which monitors the environmental impact of data centres, said the Tyneside project amounted to “little more than a press release issued eight months ago.”
The UK government maintains that it is actively supporting investment in AI infrastructure. A spokesman said ministers continue to work with OpenAI and other AI firms to enhance the country’s computing capacity. Yet the Tyneside delay has raised concerns over the pace at which Britain can translate ambitious AI commitments into tangible outcomes.
The setback comes as global demand for AI-ready data centres surges, highlighting the difficulties in delivering complex, high-cost infrastructure projects. While the Stargate initiative remains a high-profile signal of Britain’s AI ambitions, questions over timelines and execution may temper expectations of the country’s leadership in the field.
