North East named UK's second AI growth zone as OpenAI's Stargate UK selects Cobalt Park for compute

Government confirms North East as second AI growth zone - what public sector leaders need to know

The UK government has confirmed two sites near Newcastle as the country's second AI growth zone. Cobalt Park and Blyth will anchor new high-density compute and supporting infrastructure, with Cobalt Park set to host capacity for OpenAI's Stargate UK initiative.

This decision follows more than 200 expressions of interest submitted since February 2025. The first AI growth zone was previously confirmed at Culham, Oxfordshire, at the UK Atomic Energy Authority headquarters.

Where the zone will be located

The zone comprises two sites: Cobalt Park, billed as the UK's largest office park, and Blyth. Cobalt Park already hosts three carrier-neutral colocation datacentres with a dedicated National Grid supply, giving it a head start on power and connectivity.

DSIT highlighted the region's access to low-carbon and renewable energy, proximity to world-class universities, and an emerging tech ecosystem in advanced manufacturing, robotics, and space.

What an AI growth zone is - and why it matters for government

AI growth zones are designated areas suitable for AI-enabled datacentres and their critical infrastructure. The government is prioritising sites with enhanced access to power-ideally 500MW or more-and supportive planning to compress delivery timelines.

By steering projects to de-industrialised areas that can be redeveloped quickly, departments aim to avoid delays common with grid constraints and planning bottlenecks. This approach is intended to bring compute online faster and enable local economic benefit at scale.

Stargate UK: the sovereign compute play

OpenAI confirmed that Cobalt Park will host compute capacity for Stargate UK, a joint venture with NVIDIA and Nscale to build sovereign compute for AI models. This follows a July 2025 memorandum of understanding with the UK government focused on expanding national AI infrastructure.

OpenAI's CEO said the UK's long history in AI will be a foundation for accelerating scientific breakthroughs, productivity, and growth through Stargate UK.

Investment and jobs

Blackstone has committed £10bn to the Blyth development, with a further £20bn expected from additional partners following the growth zone designation. According to the technology secretary, the investment will create thousands of high-quality jobs, boost skills, and catalyse new firms across the North East.

The government estimates the initiative could unlock around £30bn in value while strengthening the UK's compute capacity and industrial base.

Immediate actions for central and local government teams

• Planning and permitting: Prepare streamlined planning processes and service-level agreements with local planning authorities. Use planning performance agreements to de-risk timelines and coordinate with environmental and transport assessments.
• Grid coordination: Engage early with National Grid ESO and DNOs on capacity, connection queues, and substation upgrades. Align datacentre phasing with power availability to avoid stranded assets.
• Skills and workforce: Partner with universities, FE colleges, and industry to build pipelines for datacentre operations, electrical engineering, cybersecurity, and AI safety. Consider targeted apprenticeships and mid-career conversion programmes.
• Sustainability and infrastructure: Prioritise low-carbon power, grid flexibility, and credible heat-reuse options. Secure water strategy and resilience plans early.
• Security and governance: Coordinate with NCSC and relevant departments on data governance, supply chain assurance, and physical security standards for sovereign compute.

Policy context and next steps

The government sought bids in February 2025, stating successful sites would be notified by summer 2025. The North East is the first of the new cohort to be announced.

Departments and local authorities should prepare delivery roadmaps covering grid, planning, workforce, and community engagement. Early, transparent communication with residents and businesses will reduce risk of delays.

Key risks to manage

• Grid delays: Connection queue congestion and substation lead times can slip schedules. Mitigate with phased capacity and shared infrastructure planning.
• Planning challenges: Address transport, noise, visual impact, and environmental constraints upfront to maintain community support.
• Supply chain and skills: Coordinate procurement for transformers, generators, and cooling systems; secure training capacity before peak demand.
• Operational resilience: Build redundancy for power, cooling, and network; stress-test incident response with cross-agency exercises.

Useful references

• Department for Science, Innovation and Technology (DSIT)
• National Grid ESO - connecting to the transmission system

Upskilling your team

If you are building internal capability for datacentre operations, AI governance, or public sector AI adoption, explore structured options by role. A practical starting point: AI courses by job.