OpenAI has paused its data centre project citing high energy costs – as Ed Miliband’s net zero agenda blamed for driving away UK’s biggest AI investment.
Labour’s Ed Miliband was slammed after the tech giant OpenAI cancelled its UK plans (Image: Getty)
Ed Miliband faced a fresh political storm today after OpenAI put its planned UK data centre on hold, citing soaring energy costs and regulatory uncertainty as the reason for pulling back.
The tech giant behind ChatGPT said it was suspending its Stargate UK project at a moment when Keir Starmer has staked his economic credibility on turning Britain into a global leader in artificial intelligence. The pause struck at the heart of that ambition — and handed opposition parties a ready-made weapon.
Last September, Stargate UK was heralded as the centrepiece of a sweeping £31billion commitment by American technology companies to invest in Britain, unveiled to considerable fanfare as part of a UK-US tech prosperity deal struck during Trump’s state visit. The scheme envisaged a major data centre facility in the North East, built alongside British firm Nscale. That vision is now on hold.
In a statement, OpenAI said: “We see huge potential for the UK’s AI future. AI compute is foundational to that goal — we continue to explore Stargate UK and will move forward when the right conditions such as regulation and the cost of energy enable long-term infrastructure investment.”
Tories pile in
The Conservatives wasted no time in pointing the finger at Miliband’s net zero agenda, reports the Daily Mail.
Shadow business secretary Andrew Griffith said: “Ed Miliband’s suicidal energy policy has just cost us another huge investment. The UK has top AI talent and labs but huge energy costs because of Labour’s mad Net Zero agenda. If Labour let us fall behind on AI, British businesses will lose out to competitors.”
Describing the development as a verdict on the Chancellor’s stewardship of the economy, shadow chancellor Mel Stride said Reeves’ handling of the brief amounted to “economic mismanagement” that was costing Britain dearly.
“Britain should be leading the AI revolution,” he said. “Instead, Labour are delivering high costs and lost opportunity. The message to investors is clear: under Keir Starmer, Britain isn’t open for business. We need cheaper energy, smarter regulation, and a government that actually understands how to attract jobs and investment.”
Anthropic, a rival AI company, added a further dimension to the debate on Thursday when it disclosed that one of its own programmes had been deemed too dangerous to put into circulation. Reform UK’s economy spokesman Robert Jenrick seized on both stories simultaneously, arguing they exposed the government’s failure to get to grips with the AI era.
“Today, OpenAI have announced they’re pausing investment in Britain until energy costs come down,” he said. “Meanwhile, Anthropic have warned their latest model poses cyber-security threats. On AI, as with everything else, Starmer is asleep at the wheel.”
The Anthropic software in question, named Mythos, was assessed as a potential national security liability and passed to a consortium of technology companies tasked with building defences against it.
Data Centres explained by Google Cloud Tech
Energy crunch
Britain’s electricity costs were already a competitive liability before the Iran war sent prices higher still — ranking among the most expensive in Europe and across the membership of the International Energy Agency.
The strain on the grid from AI infrastructure is expected to be severe. Ofgem has cautioned that the data centre capacity needed to support artificial intelligence at scale would exceed the total electricity consumption of Britain today. The numbers bear that out: approximately 140 data centres are currently in the queue for grid connections, between them requiring 50 gigawatts of supply at maximum demand — a figure that dwarfs the 45 gigawatts that represented Britain’s entire peak consumption on February 11.
A government spokesperson pushed back on the criticism.
“Our AI sector has attracted more than £100billion in private investment since the Government took office, with the sector growing 23 times faster than the wider economy last year. That is delivering the jobs and opportunities hardworking people deserve. Our focus is on continuing to create the right conditions for investment in the UK’s AI and data centre infrastructure. We are continuing to work with OpenAI and other leading AI companies to strengthen UK compute capacity.”