OpenAI looks to Canada for data centres after pausing Stargate UK; here's why

OpenAI, the creator of ChatGPT, may be seeking opportunities for data center partnerships in Canada, following a pause in its Stargate UK project. According to Bloomberg, George Osborne, OpenAI's managing director and head for countries, revealed that the company is exploring Canada due to its availability of energy and land. Speaking at Canadian Prime Minister Mark Carney's investment summit in Toronto, Osborne commended the UK government's approach to AI adoption, calling it "one of the clearer plans for AI adoption of a western government" and emphasizing its "very impressive" medium and long-term plan.

The move comes as OpenAI continues to search for locations where large AI infrastructure projects can be built and operated. OpenAI's decision follows its suspension of the Stargate UK project in April, citing the need for regulation and energy cost stability for long-term infrastructure investments. The proposed North-East England facility was to begin with 8,000 Nvidia GPUs and eventually reach 31,000 GPUs.

The project also faced scrutiny over a £1.9 billion government contract that was not signed. Electricity costs were cited as a factor, with industrial electricity prices in the UK being around four times higher than in the US, Finland, Norway, and Sweden. In contrast, Norway provides an alternative with Stargate Norway, which is built around hydropower in Narvik, targeting 100,000 Nvidia GPUs by the end of the year.

European governments are also vying for AI investment opportunities, with the EU launching a gigafactories call for over €20 billion in private investment across up to seven sites, closing bids on November 12. France has already submitted a $10 billion proposal.