OpenAI paused its planned Cobalt Park Stargate site in North Tyneside in April 2026, citing an 'unfavourable regulatory environment' and elevated energy costs. Blackstone and Nscale's adjacent AI Growth Zone developments continue.Source: Lowdown data-centres briefing

Why is UK electricity so expensive for data centres compared to the US?

OpenAI quantified UK industrial electricity as more than four times the rate in the US, Finland, Norway, and Sweden. IEA data puts UK industrial rates at roughly $0.20-0.22/kWh versus $0.06-0.07/kWh in the US — a gap worth about $100 million per year in additional costs for a 100 MW campus.Source: OpenAI / IEA

What is Cobalt Park in North Tyneside?

Cobalt Park is a technology campus in North Tyneside, North-East England, designated as an AI Growth Zone by the UK Government. OpenAI paused its planned Stargate data centre there in April 2026; Blackstone and Nscale's adjacent developments continue.Source: Lowdown data-centres briefing

Background

North Tyneside is a metropolitan borough in North-East England, home to the Cobalt Park technology campus where OpenAI had planned to site its UK Stargate data centre. In April 2026, OpenAI announced it was pausing the North Tyneside site, citing what it described as an "unfavourable regulatory environment" and elevated energy costs. The Blackstone and Nscale components of the broader AI Growth Zone development at Cobalt Park continue unaffected.

North Tyneside sits within the same North-East England cluster as Blyth (where Blackstone announced its £10 billion campus) and forms part of the AI Growth Zone policy framework the UK Government has backed. The OpenAI pause raised questions about whether the UK's regulatory and energy cost environment is competitive with other Stargate candidate sites in Europe and the Middle East.

The borough has historically relied on manufacturing and services employment following post-war industrial decline. Data centre and technology campus development at Cobalt Park represents a significant economic development opportunity for the area.

How the World Sees Them

UK government

Ministers described the OpenAI pause as a commercial decision, not a policy failure, while reaffirming commitment to the AI Growth Zone framework. Ofgem and NESO were tasked with addressing energy cost and connection timelines.

North-East England

The OpenAI pause was a blow to a region that had marketed Cobalt Park as a flagship AI campus. The continuation of Blackstone and Nscale's development has partially offset the optics.