Oracle and OpenAI Scrap Abilene AI Data Center Expansion

Oracle Corp. and OpenAI have scrapped plans to expand the Stargate artificial intelligence data center in Abilene, Texas, from 1.2 gigawatts to 2 gigawatts. The decision followed collapsed negotiations over financing, revised computing demand forecasts, and power delays. A multi-day outage caused by extreme winter weather also damaged cooling equipment and strained the relationship between the partners and site developer Crusoe.

Despite the cancelled expansion, construction continues on six additional buildings to reach the 1.2GW capacity. Oracle confirmed that a separate agreement to develop 4.5 gigawatts of capacity for OpenAI remains intact. The Stargate initiative is part of a $500 billion public-private partnership announced by President Donald Trump in January 2025, with other campuses planned for Ohio, Wisconsin, New Mexico, and other Texas counties.

Meta Platforms Inc. is currently evaluating leasing the abandoned expansion space. Nvidia Corp. facilitated these discussions and reportedly paid a $150 million deposit to Crusoe to ensure its AI chips are utilized at the facility over those from Advanced Micro Devices Inc. The announcement of the expansion's failure led to a market decline for AI-related stocks and erased Oracle's intraday gains. Meanwhile, financial commentator Jim Cramer characterized Oracle as the fastest-growing company in the data center sector, while Oracle Chairman Larry Ellison continues to invest billions in Nvidia hardware.