Microsoft Secures Major 700MW Data Center Capacity Lease in Texas

Microsoft Agrees to Lease 700MW at Texas Data Center Campus

March 24, 2026

In a significant move to secure infrastructure for its expanding cloud and AI services, Microsoft has finalized an agreement to lease approximately 700 megawatts of data center capacity at Crusoe Energy's campus in Abilene, Texas, according to a Bloomberg report citing people familiar with the matter. This deal underscores the intense competition among hyperscalers for available power and land to build the massive computing facilities required in the artificial intelligence era.

The agreement concludes negotiations that began after previous anchor tenants, Oracle and OpenAI, scaled back their ambitious plans for the site. The campus was originally conceived as part of the broader, multi-year $500 billion "Stargate" AI infrastructure initiative announced in early 2025, with initial plans to deliver up to 2 gigawatts of capacity for OpenAI's use. However, earlier this year, Oracle and OpenAI decided to cap their development at the Texas location at 1.2 gigawatts, equivalent to roughly eight data center buildings, leaving substantial capacity available.

Microsoft, which was previously in talks alongside other interested parties like Meta, has now secured the lion's share of the remaining capacity with its 700MW lease. The Abilene campus currently has two operational buildings that launched in September 2025. In a statement regarding their decision to halt further expansion there, Oracle and OpenAI said, "We considered expanding it further, but ultimately chose to put that additional capacity in other locations. Today we have more than half a dozen sites under development across multiple states."

The lease aligns with Microsoft's aggressive data center expansion strategy. The company recently disclosed that it brought 1 gigawatt of new data center capacity online in a single quarter, with a total of 2 gigawatts deployed throughout 2025. This Texas acquisition provides immediate, large-scale capacity to support its growing workloads. The deal also follows Microsoft's recent policy shift to increase transparency by no longer requiring nondisclosure agreements for its data center projects, aiming to foster better community relations.

Source: datacenterdynamics