Oracle and OpenAI scrapped plans to jointly expand a major artificial intelligence data center in Texas after negotiations dragged on due to funding issues and changing company needs. The failure of negotiations paved the way for Meta to step in and consider leasing the planned expansion site in Abilene, Texas, according to people familiar with the matter.
a leading maker of AI chips, helped facilitate discussions with developer Crusoe, responsible for developing the data center, said the sources, who asked not to be identified because the negotiations are private.
The changes to the plans highlight the complexity of building , which is expected to cost tens of billions of dollars and require cooperation from a wide range of partners. The campus being developed by Crusoe in Abilene is part of the Stargate project, widely publicized and announced last year at the White House with President Donald Trump.
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Construction continues
Although construction on the 400-hectare site continues and several parts are already operational, OpenAI and OpenAI have chosen not to proceed with preliminary leasing plans for a major expansion, according to the sources. Oracle and OpenAI are using Nvidia AI semiconductors in the Stargate data center.
With Crusoe seeking a tenant, Nvidia got involved to ensure its products continued to occupy the expanded data center rather than those of competitor Advanced Micro Devices Inc., the sources said. Nvidia paid a $150 million deposit to Crusoe and began helping to attract Meta as a tenant for the expansion.
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Last July, Oracle agreed to develop 4.5 gigawatts of data center capacity for OpenAI. The deal remains ongoing, and the companies have announced several projects in other locations, such as one near Detroit owned by Related Digital.
Oracle shares reversed early gains and fell 1.2% to close at $152.96 on Friday in New York. Other companies linked to the expansion of AI infrastructure, such as CoreWeave Inc., AMD and Nvidia, also recorded declines following the news. The intense computational power required to train and deploy AI models has led to exponential growth in data center projects on an unprecedented scale.
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Oracle has transformed its business to focus on meeting these demands from customers like OpenAI and Elon Musk’s xAI. Social media giant Meta has been investing generously in AI infrastructure for its products and has projected capital expenditures of up to $135 billion in 2026 alone.
Nvidia is the leading chipmaker for AI. The Crusoe-owned data center in Abilene is among the most important yet announced. Oracle has been quickly filling the site’s buildings with servers, which are used by OpenAI to train and deploy its products.
Oracle, Crusoe and OpenAI had been in talks since mid-2025 about expanding the facility from 1.2 gigawatts to about 2.0 gigawatts. One gigawatt is equivalent to the capacity of a nuclear reactor and can provide electricity, at any point, to approximately 750,000 homes.
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Solid relationship
Negotiations dragged on and were complicated by funding issues and OpenAI’s frequent changes to demand forecasts before they collapsed, the sources said. Additionally, relations between Oracle and Crusoe have been affected by on-premises reliability issues. Earlier this year, data center buildings went offline for days due to winter weather that affected some of the liquid cooling equipment, according to people familiar with the incident.
Both companies said their relationship remains strong and that the Oracle-leased data center in Abilene is progressing quickly.
“We are very proud of our relationship and our progress in bringing capacity online,” Oracle said in a statement.
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“Together, Crusoe and Oracle are working in perfect sync to deliver one of the world’s largest AI factories in Abilene,” Crusoe said in a statement. “Our collaboration can deliver large-scale infrastructure faster than anyone else in the industry.”
Meta and OpenAI declined to comment. Nvidia did not respond to requests for comment.
In a social media post after the story was published, Sachin Katti, infrastructure executive at OpenAI, wrote: “Our main data center, Stargate, is one of the largest AI data center complexes in the United States. We considered expanding it further, but ultimately chose to allocate this additional capacity elsewhere.”
Negotiations between Meta and Crusoe for the expansion of the Abilene unit remain ongoing and may change, the sources said. Meta is currently working on several large data centers in Louisiana and Indiana. Last month, Meta reached a deal to deploy 6 gigawatts of AMD equipment.
