AI+ Data Center | Bloomberg: Oracle and OpenAI cancel expansion plans for Texas AI factory, seek partnership with META

According to Bloomberg, Oracle (NYSE: ORCL) and OpenAI have canceled plans to expand their flagship AI data center in Texas, a project valued at billions of dollars, due to a deadlock in financing negotiations and OpenAI’s changing requirements. Meanwhile, Meta (NASDAQ: META) is considering leasing space from developer Crusoe at the planned expansion site in Abilene, Texas, with NVIDIA (NASDAQ: NVDA) assisting in facilitating discussions between Meta and the developer.

Crusoe is a data center developer, and Oracle is its main tenant. The two are currently collaborating on developing the Abilene data center campus. Oracle has filled servers within Crusoe’s buildings, primarily to provide the powerful computing capacity needed to train and deploy AI models for clients like OpenAI. Originally, they planned to expand from 1.2 gigawatts to about 2 gigawatts. Both parties stated in a joint statement that they remain in “step” and are committed to building the world’s largest “AI factory” in Abilene. However, reports indicate that relations have been tense at times, due to reliability issues caused by cold weather in winter, which led to cooling system failures and power outages lasting several days.

Meta and OpenAI declined to comment, and NVIDIA did not respond to requests for comment. Negotiations between Meta and Crusoe regarding the Abilene expansion are ongoing and still subject to change. Meta is also simultaneously building large data centers in Louisiana and Indiana, and just last month, it announced an agreement to deploy 6 gigawatts of AMD equipment.

The campus developed by Crusoe in Abilene is part of the highly anticipated “Stargate” project, covering 1,000 acres, with some areas already operational. Oracle and OpenAI have decided not to proceed with their initial plans for large-scale leasing expansion. NVIDIA quickly stepped in to ensure its products continue to fill the expanded data centers, rather than falling into the hands of competitor AMD. NVIDIA paid Crusoe a deposit of $150 million and has begun lobbying efforts to make Meta a tenant for the expansion area.

Last July, Oracle agreed to develop a 4.5 gigawatt (GW) data center capacity for OpenAI. The project is still proceeding as planned, and both parties announced other projects at different locations, such as facilities near Detroit owned by Related Digital.