OpenAI Pauses UK Stargate Project as Power Costs Run 2x U.S. Levels in Europe
Updated
Updated · CNBC · May 18
OpenAI Pauses UK Stargate Project as Power Costs Run 2x U.S. Levels in Europe
1 articles · Updated · CNBC · May 18
OpenAI halted its Stargate project in the U.K. last month, citing energy costs and the country's regulatory environment as Europe pushes to expand AI compute capacity.
European power prices have surged further amid the U.S.-Iran war, and the IEA says energy-intensive industries in Europe paid about double U.S. levels last year and 50% more than in China and India.
Those costs are already reshaping investment: experts said the next $7 billion data center is more likely to be built in the U.S. or China, while Norway, Sweden and Denmark are attracting hyperscaler spending.
Data centers now use 2% of global electricity, up from 1.7% in 2024, and political resistance tends to intensify once they exceed 5% of national consumption; the U.K. is already at 5.8%.
Europe's five biggest data-center markets are expected to see capacity costs rise another 12% in 2026, underscoring a widening gap between the bloc's AI ambitions and its energy system.
Is Europe's energy crisis handing the future of artificial intelligence over to the United States and China?
As Nordic nations become AI powerhouses, will their own grids be the first casualty of Europe's tech ambitions?
Are citizens' rising utility bills the hidden cost of the global AI technology race?
OpenAI Halts £2.5 Billion Stargate UK Project: High Costs and Regulatory Uncertainty Threaten Britain’s AI Ambitions
Overview
On April 9, 2026, OpenAI halted its Stargate UK project, delivering a significant blow to the UK government’s strategic vision for AI-driven economic growth. This decision immediately raised concerns about the future of large-scale AI infrastructure investments in the UK. In response, a government spokesperson defended Britain’s investment climate, highlighting over £100 billion in private commitments and reaffirming dedication to creating the right conditions for AI and data centre investment. The government also confirmed ongoing collaboration with OpenAI and other leading AI companies to enhance the UK’s compute capacity, despite the setback.