UK AI Minister Hits Out at OpenAI for Stargate Project Pause

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(Bloomberg) — Britain’s AI minister dinged OpenAI for halting a major data center project in the UK and blaming the decision on the country’s energy costs and regulation.

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“Since that time of commitment, nothing has changed in the energy-price experience with that site,” said Kanishka Narayan, UK minister for AI and online safety, at a Bloomberg event in London on Thursday. “Nothing has changed in the regulatory experience.”

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Narayan instead pointed to OpenAI’s broader attempts to streamline its investments after previously committing to spend more than $1 trillion on chips and data centers for artificial intelligence. “What has changed are very well-publicized challenges of financing internally to the company, which has also resulted in pullback from Norway Stargate.”

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Last week, OpenAI announced it was pausing Stargate UK, a local version of its effort to build out global AI infrastructure, until it sees the “right conditions” on regulation and energy costs, which are among the highest in Europe. Days later, Bloomberg News reported that Microsoft Corp. had agreed to rent data center capacity at a site in Norway that was originally intended for OpenAI as part of the Stargate initiative. 

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OpenAI’s decision was a setback for the UK’s ruling Labour Party, which has talked up AI investments as a pillar of its economic growth program. The ChatGPT maker first announced the UK project in September alongside chipmaker Nvidia Corp. and data center developer Nscale. A large data center was slated to open in northern England as one of five “AI Growth Zones” — regions where the government has pledged to subsidize electricity costs. 

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Though the company didn’t specify which regulations led to its decision, the country’s copyright rules were a sticking point, according to multiple people familiar with the matter who asked not to be identified discussing internal matters. OpenAI declined to comment. 

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In the UK, any AI company looking to use copyrighted work to train its models must first seek permission. The UK government had begun a process to revamp these laws and OpenAI argued for a legal exemption for the data it mines.

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British officials initially considered introducing an opt-out model for copyright owners, but the government reversed that position after significant backlash from the creative community, including megastars like Elton John and Dua Lipa. A government report said there was “no consensus” on copyright objectives and didn’t offer a timeframe for any changes.

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“The government have punted it into the long grass,” Ed Newton-Rex, a former tech executive who runs Fairly Trained, a non-profit focused on generative AI data practices. As the existing rules stand, he said, it would effectively be illegal for OpenAI to train its models in the UK like it does in the US. 

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But he argued that OpenAI was using the policy issue as a rational to cover for other factors. “It’s a convenient bogeyman,” he said.

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Liz Kendall, the UK technology secretary, said on Thursday that the government is still working on a plan on copyright and AI. “We will come forward with proposals on this,” she said in a briefing. “I am determined to find a way forward.”