Media reports indicate that due to financing issues and constantly changing demand forecasts from OpenAI, Oracle and OpenAI have abandoned plans to expand an AI data center in Abilene, Texas. Developer Crusoe is seeking new tenants, while Meta is considering leasing the expansion site. NVIDIA has paid a $150 million deposit and is assisting in advancing relevant negotiations to ensure the expanded data center continues to utilize its AI chips.
Media reports indicate that Oracle Corporation and OpenAI have abandoned plans to expand a flagship artificial intelligence data center in Texas, as prolonged negotiations over financing issues and OpenAI's evolving requirements led to the decision.
According to sources familiar with the matter, the breakdown of the talks created an opportunity for Meta to step in. Meta is considering leasing the expansion site located in Abilene, Texas, from developer Crusoe. Sources also noted that NVIDIA, a leader in AI chips, facilitated discussions between Meta and the developer.
This shift in plans underscores the complexity of building AI data centers, which are expected to require hundreds of billions of dollars in investment and coordination among multiple partners.
The data center campus developed by Crusoe in Abilene is part of the highly anticipated "Stargate" project, which was announced last year at the White House by President Trump. Sources indicated that the 1,000-acre campus is still under construction, with some facilities already operational; however, Oracle and OpenAI ultimately decided against proceeding with the planned large-scale expansion.
Oracle and OpenAI utilized NVIDIA chips for the Stargate project. According to sources, as Crusoe sought new tenants, NVIDIA intervened to ensure that the expanded data center would continue to use its chip products rather than those of competitor AMD. It was reported that NVIDIA paid a $150 million deposit to Crusoe and began assisting in attracting Meta as a tenant for the expansion project.
In July of last year, Oracle agreed to develop 4.5 gigawatts of data center capacity for OpenAI. The agreement remains on track, and both parties have announced projects at various other locations, such as a facility owned by Related Digital near Detroit.
Oracle shares erased earlier gains and closed down 1.11% at $152.96 in New York on Friday. Other companies associated with AI infrastructure development, such as CoreWeave, AMD, and NVIDIA, also declined following the announcement.
Prolonged negotiation periods, coupled with frequent changes in financing and requirements, resulted in the collapse of the partnership.
The immense computational power required to train and deploy AI models has spurred an unprecedented wave of data center construction. Oracle has realigned its business strategy to focus on providing data center computing power for clients such as OpenAI and Musk’s xAI. Meta is also making significant investments in AI infrastructure for its products and anticipates capital expenditures as high as $135 billion in 2026 alone. NVIDIA remains the dominant supplier of AI computing chips.
The data center owned by Crusoe in Abilene is one of the most closely watched projects currently. Oracle is rapidly deploying servers into the campus buildings, which OpenAI uses to train and operate its AI products. Since mid-2025, Oracle, Crusoe, and OpenAI have been discussing expanding the facility’s capacity from 1.2 gigawatts to approximately 2.0 gigawatts. One gigawatt roughly equals the power output of a nuclear reactor and can supply electricity to about 750,000 households at any given moment.
Sources told the media that the negotiations had dragged on for too long, and issues related to financing as well as frequent changes in OpenAI's demand forecasts complicated the discussions, ultimately leading to the collapse of the partnership.
Additionally, the relationship between Oracle and Crusoe became strained due to reliability concerns surrounding the project. Sources informed the media that earlier this year, cold weather affected some liquid-cooling equipment, causing the data center building to go offline for several consecutive days.
Both companies stated that their relationship remains solid, with the Abilene project leased by Oracle advancing rapidly.
Oracle stated in its announcement:
"We are extremely proud of our partnership and the ongoing deployment of computing capacity."
Crusoe stated in its announcement:
"Crusoe and Oracle are working closely together to build one of the largest AI factories globally in Abilene. Our collaboration enables us to deliver hyperscale infrastructure faster than anyone else in the industry."
Sources told the media that negotiations between Meta and Crusoe regarding the Abilene expansion project are still ongoing, and circumstances may still change. Currently, Meta is constructing multiple large data centers in Louisiana and Indiana. Last month, Meta also reached an agreement with AMD to deploy 6 gigawatts of equipment.
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Editor/Liam
