AI Growth Zone established in North East England
Northumberland and Tyneside sites selected for major data centre investment
17 September 2025
The UK government has announced the creation of a new AI Growth Zone in North East England, projected to generate more than 5,000 jobs and attract up to £30 billion in private investment, in a major effort to position the region as a leading European hub for artificial intelligence and data infrastructure.
The Growth Zone will be established across sites in Blyth and Cobalt Park (pictured above), near Newcastle, and is set to become one of the largest data centre clusters in Europe. The initiative is backed by a mix of domestic and international partners, including UK-based infrastructure firm Nscale, along with US companies OpenAI and NVIDIA. The announcement follows a broader UK-US technology agreement signed during President Donald Trump’s state visit.
Blackstone has already committed £10 billion to the Blyth site, with the new designation expected to unlock a further £20 billion in potential investment. The zone will also house “Stargate UK”, a new AI infrastructure venture led by Nscale, OpenAI and NVIDIA. The initial phase of Stargate UK will see OpenAI deploy up to 8,000 GPUs—scalable to around 31,000—to power AI workloads across UK industries.
According to the government, the zone is expected to accelerate AI development in key sectors including healthcare, clean energy, advanced manufacturing and finance. A strong focus has been placed on developing local talent pipelines, with universities such as Newcastle, Durham, Northumbria and Sunderland already involved in AI research and workforce training. Newcastle University confirmed plans to expand its programmes in AI, data science, and data-centre engineering in response to the announcement.
Energy infrastructure will also see significant upgrades, with the region’s data capacity expected to reach 1.1 GW over the next six years. The North East’s existing access to low-carbon and renewable energy sources was a key factor in its selection. The QTS Cambois Data Centre Campus in Blyth, due to open in 2028, is among the planned projects to support this expansion.
The initiative aims to support both regional economic growth and national strategic goals, including increased adoption of AI in public services and enhanced AI safety. UK Technology Secretary Liz Kendall said the project would “create thousands of high-quality jobs, boost skills and inspire the creation of new firms.” North East Mayor Kim McGuinness said the deal placed the region “at the forefront of the next technology revolution.”
Stargate UK is expected to operate across multiple sites, including Cobalt Park, which will be integrated into the AI Growth Zone. The facility will serve as sovereign infrastructure for deploying OpenAI’s technology in the UK. Nscale CEO Josh Payne described the initiative as “building the most powerful supercomputer in the country,” in partnership with Microsoft.
OpenAI CEO Sam Altman said the UK remained a “pioneer of AI” and highlighted the potential for the new infrastructure to support scientific research, productivity, and economic growth. NVIDIA CEO Jensen Huang said the collaboration marks a “historic chapter” in UK-US tech relations and reflects the UK’s strategic position in the global AI landscape.
The AI Growth Zone forms part of the government’s wider Plan for Change policy agenda, which includes measures to support innovation, regional development, and energy resilience.