Cobalt Park in North Tyneside was recently designated an ‘AI growth zone’ during a high-profile visit by the US President. However, revelations regarding OpenAI’s Stargate UK project have cast doubt on the integrity of this initiative, with significant portions of the touted £30bn investment appearing to be little more than unsubstantiated claims.
Unfulfilled Promises
The Stargate UK initiative, which was expected to be OpenAI’s flagship investment in the UK, has faced severe setbacks since its announcement. Initially framed as a transformative step in the US-UK technological alliance, the project was put on hold in April due to rising concerns over regulatory hurdles and exorbitant energy costs.
Recent findings suggest that OpenAI has not even visited Cobalt Park, one of the project’s key locations. The anticipated £20bn investment, part of the £30bn potential, seems to have been overstated, raising questions about the project’s viability and the government’s transparency regarding foreign investment.
A Government PR Stunt?
Sources familiar with the development process indicate that the UK government approached local firm Nscale and OpenAI just before the US President’s visit in September 2025, urging them to announce the Stargate UK project at Cobalt Park. “They needed a big announcement,” noted one insider, hinting at a possible orchestrated PR effort rather than a genuine investment strategy.
The Stargate UK initiative was presented amid a flurry of other technology deals between the UK and US, creating a veneer of momentum. However, as investigations uncovered, many of these deals have since been labelled “phantom investments”, suggesting a lack of substantial follow-through from the companies involved.
Local Authorities Left in the Dark
A Freedom of Information (FoI) request revealed that neither OpenAI nor Nscale had engaged with local authorities in North Tyneside regarding the project. Only Nvidia, known for manufacturing AI chips, made an appearance in February 2026, five months after the President’s visit.
Local leaders expressed surprise upon the announcement of Stargate UK. “We were really taken aback,” said John Johnsson, leader of the Conservatives in North Tyneside. The lack of communication and coordination is troubling for a project that was heralded as a significant investment in Britain’s AI infrastructure.
Infrastructure Concerns
Further complicating matters, data from the UK’s National Energy System Operator revealed that the Cobalt Park site lacks an adequate grid connection. This raises serious questions about its capacity to support a project of this magnitude. Johnsson noted the absence of the necessary infrastructure, stating, “The fundamentals, energy costs, grid capacity, and infrastructure do not appear to have been in place to support a project of this scale.”
The government maintains that it is committed to creating the right conditions for investment in AI and datacentre infrastructure, with plans for a dedicated taskforce to facilitate development in the North East. However, scepticism remains about the feasibility of these ambitious plans.
Why it Matters
The disappointing trajectory of the Stargate UK project highlights broader challenges within the UK’s strategy for attracting foreign investment in technology and AI. As communities hope for economic revitalisation through these high-profile deals, the reality of unfulfilled promises can lead to disillusionment and mistrust. Transparency and genuine engagement with local stakeholders will be essential to ensure that future initiatives do not follow the same path as Stargate UK.
