Cobalt Park in North Tyneside was hailed as a beacon of artificial intelligence investment during a high-profile visit from the US president, yet recent revelations cast doubt on the grand ambitions of the Stargate UK project. Initially projected to be a £30 billion AI initiative, the reality appears far less promising, with indications that much of the touted investment may have existed only in press statements.
A Grand Vision Unravels
The Stargate UK initiative was set to be OpenAI’s monumental foray into the UK, aiming to bolster the US-UK tech alliance with a multibillion-pound data centre project. However, excitement fizzled when plans were paused in April, ostensibly due to concerns over the regulatory landscape and soaring energy costs. Now, reports indicate that OpenAI has not even visited the key site at Cobalt Park, raising questions about the authenticity of the project and the government’s investment claims.
Local sources indicate that the UK government approached OpenAI and Nscale shortly before the US president’s visit last year, keen to orchestrate a substantial announcement. “They needed a big announcement,” a source noted, suggesting that the project was more about optics than substance.
The Reality Check
The announcement of Stargate UK came amid a flurry of tech deals during the September visit, echoing the ambitious Stargate AI project in the US, where OpenAI pledged a staggering $500 billion to maintain American leadership in AI. In contrast, the UK’s ambitions seemed modest, with plans for infrastructure development in collaboration with Nscale, which is currently constructing a supercomputer in Essex, and Nvidia, the AI chip giant.
A Freedom of Information request has since revealed that neither OpenAI nor Nscale engaged with local authorities in North Tyneside, a surprising oversight for a project that was supposed to represent a significant investment in AI infrastructure. Only Nvidia seemed to have made contact, visiting the North East combined authority in February 2026—five months after the presidential visit.
Investment Promises or Publicity Stunts?
The government’s claim that the AI growth zone would attract £30 billion in investment has come under scrutiny. Of that, £10 billion is reportedly committed by Blackstone for a separate data centre project in the area, while the remaining £20 billion was described as “potential” investment from future partners. But upon further investigation, it appears that this figure is merely the estimated cost required to develop the necessary infrastructure, rather than an actual commitment from investors.
Kamila Kingstone from Spotlight on Corruption has pointed out the misleading nature of this claim, emphasising that it gives false hope to communities expecting substantial economic boosts when the financial reality could be starkly different.
Local Conservative leader John Johnsson expressed frustration over the lack of transparency surrounding the project. “When it was announced, we were really taken aback. There was no prior communication about these discussions,” he said, highlighting the disconnect between local authorities and government announcements.
Infrastructure Woes
Adding to the uncertainty, an FoI request revealed that the site at Cobalt Park does not currently have a grid connection, which is critical for a project of this scale. Instead, alternative power solutions have been proposed, yet specifics remain redacted. Johnsson voiced his concerns, stating, “It’s now looking highly unlikely whether the project is going to come to North Tyneside,” citing fundamental issues with energy costs and infrastructure as major stumbling blocks.
The government has maintained its commitment to creating favourable conditions for AI investment, with plans for a dedicated taskforce to enhance regional planning and skills. They’ve promised that the North East AI growth zone will increase its energy capacity to 1.1GW once operational, with over 400MW expected to be available by 2028.
Why it Matters
The unfolding saga of Stargate UK underscores the complexities of technological investment and the often fraught relationship between government enthusiasm and actual execution. As local communities look towards AI as a potential economic boon, the lack of tangible progress raises critical questions about transparency and accountability in public investment initiatives. The case illustrates the importance of not just grand announcements but real, actionable steps that can translate promises into reality for the communities that need it most.