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Government confirms North East as location of second AI growth zone
UK government has selected two sites near to Newcastle as the home of its second AI growth zone, with one of them confirmed to be housing compute infrastructure for OpenAI's Stargate UK initiative
The government has confirmed that two sites in the North East will be the location of the UK’s second artificial intelligence (AI) growth zone, with one of the developments also set to be the launch site for OpenAI’s Stargate UK endeavour.
More than 200 expressions of interest were directed to the government in response to its call for local authorities and other related parties to bid to become AI growth zones back in February 2025.
At this point, the government had already confirmed the first AI growth zone would be located in Culham, Oxfordshire, at the headquarters of the UK Atomic Energy Authority (UKAEA).
It initially stated that successful bidders would be notified by the summer of 2025 if they had been successful, with this AI growth zone in the North East the first of the new cohort to be announced so far.
The zone will be made up of two distinct sites near to Newcastle. One at Cobalt Park, which is billed as being the UK’s largest office park, and another in Blyth.
“The AI growth zone will generate growth opportunities across the region, capitalising on access to the UK’s largest source of low carbon and renewable energy, world-class universities and the region’s emerging tech ecosystem in areas including advanced manufacturing, robotics and space,” said the Department for Science, Innovation and Technology (DSIT), in a statement.
It is understood that Cobalt Park is already home to three carrier-neutral colocation datacentres, which benefit from a dedicated energy supply from the National Grid.
What is an AI growth zone?
According to the government, AI growth zones are designated sites that are well-suited to housing AI-enabled datacentres and their supporting infrastructure. Ideally, these zones should have “enhanced access” to power supplies of at least 500MW and sympathetic planning support.
This is because datacentres are notoriously power-hungry entities, and siting them in areas where energy is in short-supply could slow down the time it takes to bring one of these new AI server farms online.
This is also why the government is prioritising areas where it is possible to fast-track the process of securing planning permission for a new datacentres as potential AI growth zones, as there are numerous examples of similar projects being kicked into the long grass because of planning issues.
To address both these points, the government has said it’s looking to build AI growth zones in de-industrialised parts of the country that can be readily redeveloped to speed up the time it takes to bring them online.
In a separate announcement, OpenAI – the company behind the popular AI chatbot ChatGPT – confirmed that the AI growth zone at Cobalt Park will be one of several UK sites that will host compute capacity for its Stargate UK venture.
Stargate UK is a joint venture between Open AI, NVIDIA and Nscale that is geared towards building out the UK’s sovereign compute capacity for the sole purpose of hosting AI models.
News of the venture follows the announcement in July 2025 that OpenAI had signed a memorandum of understanding (MoU) with the government, focused partly on exploring opportunities to build out the nation’s AI infrastructure.
OpenAI CEO Sam Altman said the UK has a long history of pioneering the use of AI technologies, which Stargate UK will build upon.
“Stargate UK builds on this foundation to help accelerate scientific breakthroughs, improve productivity, and drive economic growth,” said Altman. “This partnership reflects our shared vision that with the right infrastructure in place, AI can expand opportunity for people and businesses across the UK.”
Meanwhile, investment management company Blackstone has stumped up £10bn in investment for the Blyth side of the development already, and a further £20bn is now expected to be poured into the project from additional partners now the AI growth zone designation is confirmed.
Newly appointed technology secretary Liz Kendall said that the decision to create an AI growth zone in the North East of England will give the region an economic boost.
“This investment will create thousands of high-quality jobs, boost skills and inspire the creation of new firms,” she said. “The North East’s industrial legacy is evolving into a future of innovation – unlocking a potential £30bn and powering communities with the skills and careers to lead the UK’s next industrial revolution.”
Read more about AI growth zones
- The UK government has unveiled its 50-point AI action plan, which commits to building sovereign artificial intelligence capabilities and accelerating AI datacentre developments - but questions remain about the viability of the plans.
- As part of its AI opportunities action plan, the government is encouraging local authorities to put in bids for AI growth zones.
