Why OpenAI is Investing in a London Base Amid Stargate Halt
Days after OpenAI paused its Stargate UK data centre project, the company has announced it has signed a lease for its first permanent base in London.
The office will be located at Regent Quarter in King’s Cross and is set to house up to 544 staff when it opens in 2027. It is an 88,500 square foot site, spanning Jahn Court and the Brassworks Building.
Following the halted Stargate development in North Tyneside, these new plans bring infrastructure constraints into sharper focus as AI adoption expands.
With a new office in the city, London will be a central node in OpenAI's global network, particularly for the research and development of AI systems that depend on large-scale data centre capacity.
The new space will also support teams across engineering and commercial functions, which rely on high-performance computing infrastructure to operate effectively.
Phoebe Thacker, Global Head of Data Research Programmes and London site lead at OpenAI, says: "The UK has an incredible depth of talent and a strong track record in AI. London is already a key hub for our research and teams, and this new office gives us the space to keep building here.
“We’re seeing real momentum in how businesses, developers and institutions across the UK are using AI, and we want to support that growth. This investment reflects our long-term commitment to the UK and the role it can play in shaping how AI is developed safely and used to benefit people all over the world.”
With the demand for AI services rising, pressure is being placed on data centre infrastructure that underpins model training and inference.
UK for OpenAI hyperscale
As physical data centre expansion faces hurdles, London’s role as OpenAI’s largest research hub outside the US reinforces the need for reliable, scalable compute environments.
The company already employs around 200 people in London across multiple functions including engineering and enterprise support. These teams contribute to systems such as Codex and newer AI models, all of which depend on distributed computing environments typically hosted in hyperscale or specialised data centres.
OpenAI's investment in a London office is expected to contribute to further innovation and economic growth, as the UK represents one of the world's leading markets, according to the company.
Stargate UK pause raises capacity questions
Days before confirming the new base in London, OpenAI made the decision to pause Stargate UK – highlighting the challenges currently facing data centre development in the UK.
The project, unveiled in 2025 with partners Nscale and NVIDIA, aimed to expand sovereign compute capacity.
Plans outlined deployment of up to 8,000 GPUs in early 2026, scaling to around 31,000 GPUs over time. However, the company cited high energy costs and ongoing regulatory uncertainty as reasons for the pause.
Without the substantial and stable power supply that data centres require, projects often face delays or become commercially unviable.
An OpenAI spokesperson says: "We see huge potential for the UK’s AI future. London is home to our largest international research hub and we support the government's ambition to be an AI leader."
The pause raises broader questions about how the UK meets growing demand for compute. AI systems require continuous scaling of infrastructure, yet energy pricing and permitting processes are currently key constraints for operators and developers.
Policy alignment and ecosystem impact
Despite the halt, OpenAI continues to align with UK digital and infrastructure priorities.
Its 2024 memorandum of understanding with the government included a data residency commitment for UK customers, agreements with the Ministry of Justice and is supporting UK SMEs through its SME Accelerator programme, helping organisations adopt AI tools that depend on robust backend infrastructure.
Antony Walker, Deputy CEO at techUK, says: "The expansion of OpenAI’s operations in London will have real benefits for the UK.
“This investment will further deepen the UK’s pool of AI knowledge, talent and research and help to keep the UK at the forefront of the development and deployment of AI globally.”
At the same time, property developers continue to position London as a hub for technology firms whose operations depend on data centre ecosystems.
Oliver Jackson, Director at Endurance Land, says the letting marks a “pivotal moment” for Regent Quarter as a “destination for pioneering organisations shaping the future of their industries”.
He adds: “As we continue to evolve the estate, our ambition at Endurance Land is to create a campus for knowledge-led occupiers that attracts and supports leading global innovators, fostering a dynamic ecosystem defined by collaboration, innovation and long-term growth.”
Demand for talent and research space is quickly growing, as signalled by the announcement of the new office – yet the physical infrastructure required to power that work is facing slower progress.