Oracle and OpenAI Cancel Major Texas Data Center Expansion as Meta Eyes Capacity

Oracle and OpenAI Cancel Major Texas Data Center Expansion as Meta Eyes Capacity

March 6, 2026

A major expansion of a flagship artificial intelligence data center campus in Texas has been canceled, marking a significant shift in strategy for the key partners behind the ambitious "Stargate" project. The move underscores the immense financial and logistical challenges facing the rapid scaling of AI infrastructure, even for industry leaders.

Oracle and OpenAI have jointly decided to scrap plans to further grow their Abilene Stargate data center campus, which is developed by Crusoe Energy on Lancium's Clean Campus. The site, the first Stargate project to become operational following the announcement of a massive joint venture last year, initially launched two buildings last September. A further six were slated for this year, which would have brought the total capacity to approximately 1.2 gigawatts (GW), with an eventual goal of reaching 2GW.

According to reports, the expansion was derailed by financing complexities and OpenAI's evolving requirements. The AI company's frequent changes in demand forecasting and its shifting vision for the Stargate initiative complicated planning. Furthermore, a multi-day outage earlier this year, caused by winter weather affecting liquid cooling equipment, reportedly strained the relationship between OpenAI and site developer Crusoe.

Adding to the decision, power is not expected to be fully available at the Abilene site for another year. By that time, OpenAI aims to deploy a newer generation of Nvidia chips, leading the company to prefer allocating future capacity to new locations. "Our flagship Stargate site is one of the largest AI data center campuses in the United States," said Sachin Katti, OpenAI's compute scaling executive. "We considered expanding it further, but ultimately chose to put that additional capacity in other locations." Katti noted the company has over half a dozen sites under development across multiple states, including a new project with Oracle in Wisconsin.

The cancellation occurs amid broader financial pressures. OpenAI has adjusted its projected compute spend to around $600 billion by 2030, a reduction from an earlier $1.4 trillion pledge for 2033. With a significant portion of that spend potentially directed to Oracle, the cloud provider is itself grappling with funding its build-out, resorting to increased debt and cost-cutting measures. Key financial backer SoftBank is also seeking substantial loans to support the expansion.

In a related development, Nvidia has intervened to facilitate a new tenant for the unused Abilene capacity. In an unusual step to prevent a rival chip designer's hardware from occupying the site, Nvidia has reportedly paid a $150 million deposit to Crusoe and is brokering talks to lease the space to Meta. While a final deal between Crusoe and Meta remains unsigned, the move highlights the strategic maneuvering within the competitive AI hardware ecosystem.

Source: datacenterdynamics