Labour’s Ed Miliband was being blamed today after OpenAI – the tech giant behind ChatGPT – put its UK data centre on hold.
The California-based firm pointed to high energy costs and regulatory uncertainty for its decision to pause its Stargate UK project.
Stargate UK was announced in September last year as part of a combined £31billion investment in Britain by US tech firms.
The announcement of the investment, as well as a UK-US tech prosperity deal, was made during US President Donald Trump’s state visit to Britain.
Stargate UK is a data centre planned for the North East in partnership with British firm Nscale.
The delay to the project is a huge blow to Prime Minister Keir Starmer’s bid to turn the UK into ‘one of the great AI superpowers’, as Labour scrambles for economic growth.
The Tories heaped blame on the ‘Net Zero’ agenda of Mr Miliband, the Energy Secretary, for harming Britain’s AI ambitions.
Senior Conservative MP Andrew Griffith, the shadow business secretary, said: ‘Ed Miliband’s suicidal energy policy has just cost us another huge investment.’
Mr Griffith added: ‘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.’
Mel Stride, the shadow chancellor, said OpenAI’s decision was a ‘damning verdict’ on Chancellor Rachel Reeves’ ‘economic mismanagement’.
‘Britain should be leading the AI revolution’, Sir Mel 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.’
Ofgem, the energy regulator, recently warned that vast data centres needed for AI systems will require more energy than is currently used by the whole country.
It revealed that a ‘significant portion’ of projects in the queue for connections to the UK’s electricity grid are data centres.
Around 140 data centres were found to have come forward for grid connections, requiring 50 gigawatts of capacity at peak time.
But Ofgem noted how, by comparison, peak electricity demand across the whole of Britain on February 11 was just 45 gigawatts.
Even before the Iran war sent energy costs rocketing, Britain had among the highest electricity prices in Europe and International Energy Agency members.
Sam Richards, CEO of pro-growth campaign group Britain Remade, said: ‘OpenAI halting their flagship British investment is a stark warning: Britain is becoming too expensive to build in.
‘When global tech firms cite sky-high energy costs and slow regulation ministers must pay attention and meaningfully act.
‘You cannot deliver growth or become an AI superpower with some of the highest industrial electricity prices in the developed world. Investors will simply go elsewhere.
‘If ministers are serious about growth, they must act now to bring down energy bills for industry and business as well as remove the barriers to building.
‘Until we fix that, we’ll keep losing jobs, investment and the industries of the future to countries that are cheaper, faster and more serious about growth.’
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.’
Reform UK’s economy spokesman Robert Jenrick pointed to how Anthropic, another leading AI company, on Thursday warned it had developed a programme that is ‘too dangerous to release to the public’.
It said the software, Mythos, was a national security risk and was handing it over to a group of tech companies to create cybersecurity defences.
Mr Jenrick said: ‘Today, OpenAI have announced they’re pausing investment in Britain until energy costs come down.
‘Meanwhile, Anthropic have warned their latest model poses cyber-security threats. On AI, as with everything else, Starmer is asleep at the wheel.’
A Government spokesperson said: ‘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.’
