OpenAI decision a wake-up call for our tech plans

Last summer, I wrote a column that said the North East mustn’t be an afterthought in artificial intelligence.

A few months later, the Government announced the North East AI Growth Zone – a designation that gives our region priority access to planning approvals and grid connections for data centre development.

It felt like (finally!) we were the opposite of an afterthought.

It was to bring £30 billion in claimed investment, the creation of 5000 jobs and the hero of the deal: OpenAI’s Stargate UK project at Cobalt Park, in Newcastle.

Last week, OpenAI put Stargate UK on indefinite hold, citing high energy costs and regulatory uncertainty.

Yet at the time, the Government's own announcement said the Growth Zone would “capitalise on access to the UK’s largest source of low-carbon and renewable energy”.

So why has the headline tenant walked away citing energy costs?

I wish I could say I was surprised.

But the AI Growth Zone was announced as a political event, rather than a local industrial strategy.

It was timed to coincide with Donald Trump’s state visit and framed as part of the UK-US Tech Prosperity Deal.

Fortunately, OpenAI’s pausing of Stargate UK is not the end of the Growth Zone. It was only one of two sites mentioned in the original announcement.

The second is at Cambois, near Blyth, Northumberland, where US investment firm Blackstone is building a £10 billion data centre campus through its subsidiary QTS.

The Cambois project is going ahead.

But a read of the planning documents still raises some cause for concern.

The short version is that very few of the regional benefits listed have been made contractually conditional.

The socio-economic assessment estimates 400 permanent operational jobs once the buildings are finished.

The 2700 indirect jobs cited alongside that figure are modelled estimates, not commitments secured by binding local procurement obligations.

That’s £10 billion of investment, on a 540,000sq metre site, delivering 400 long-term roles.

Meanwhile, the environmental assessment projects that emissions will double Northumberland’s industrial carbon output.

Northumberland County Council did ask QTS to include renewable energy generation and battery storage in the design. However, QTS discounted the request and the project was approved anyway.

None of this means the Growth Zone is over. The designation still exists. Blackstone’s commitment to Blyth still stands.

But if the region is serious about making it work, the approach needs to change.

The North East has a genuine renewables cluster, with the Offshore Renewable Energy Catapult on the doorstep of the planned data centre site.

Newcastle and Northumbria universities run world-class artificial intelligence and computing research programmes.

The region has decades of expertise in offshore wind, advanced manufacturing and grid integration.

The strengths the Department for Science, Innovation & Technology statement named are real.

The question is whether the Growth Zone has been designed to use them.

Three things would change that answer.

First, energy.

I previously worked with renewables business Sherwood Power, looking at how data centre energy demands can be integrated with local renewable generation and battery storage at the grid edge.

That showed it is possible for new energy capacity to be built alongside the infrastructure that consumes it.

This is the kind of model that would make a region’s renewable cluster a genuine advantage, rather than a marketing line.

Second, procurement.

If we want artificial intelligence investment to benefit the regional economy beyond the construction phase, planning agreements should require a defined percentage of operational supply chain spend to go to regionally-based companies.

This is standard practice in other forms of publicly-supported industrial development.

Third, integration.

The Growth Zone should be designed to draw on the region’s existing tech sector, its universities, its advanced manufacturing capability and its renewables expertise.

That means involving them in the scoping before big announcements, rather than afterwards.

It also means publishing the modelling and assumptions that sit behind the headline figures, so the region can see what was planned for and what was not.

This might sound like I’m opposed to data centres. I am not. I run an artificial intelligence consultancy.

I want this technology to do extraordinary things for the North East, and I believe the opportunity to get this right is still open.

But getting it right means treating OpenAI’s announcement as a wake-up call, rather than a setback, and being prepared to ask harder questions before the next announcement.

We need to be asking how the region’s strengths are being used, what is being secured by binding agreements and what success would look like for the people who live in the North East.

Laura Richards is an artificial intelligence specialist and founder of Idea Junkies

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