Microsoft in Advanced Talks to Lease Hundreds of Megawatts at Texas AI Data Center Campus

Microsoft in Advanced Talks to Lease Hundreds of Megawatts at Texas AI Data Center Campus

March 12, 2026

In a significant move within the competitive AI infrastructure landscape, Microsoft is reportedly in advanced negotiations to secure a major block of data center capacity at the Crusoe-developed Abilene campus in Texas. This potential deal highlights the intense scramble for power and computing resources needed to fuel the generative AI boom, as cloud giants seek to lock in capacity for future growth.

According to a report from The Information, citing a person with direct knowledge of the discussions, Microsoft is aiming to lease several hundred megawatts at the site, which was originally conceived as part of the ambitious "Stargate" joint venture between Oracle and OpenAI. The campus, located on Lancium's Clean Campus in Texas, began operations last September with two data center buildings operated by Oracle for OpenAI's use. Six additional buildings are slated to come online this year, bringing the site's total capacity to approximately 1.2 gigawatts (GW).

However, plans to expand the Abilene campus further to 2GW were abandoned due to financing challenges and OpenAI's evolving demand forecasts. This shift has opened the door for other hyperscalers. The report indicates that the capacity agreements under discussion with Microsoft could cover up to 600 megawatts (MW), likely to be deployed in phases. Meta is also said to be in separate discussions for capacity at the same location.

The development follows a pivotal moment for the site's financing. After Oracle scaled back its involvement, Nvidia reportedly paid a $150 million deposit to developer Crusoe to help secure the project, with the strategic aim of ensuring its hardware is deployed within the data centers. This underscores the critical role chipmakers play in shaping AI infrastructure.

For Microsoft, the potential lease aligns with its massive infrastructure expansion. The company recently disclosed it brought 1GW of data center capacity online in a single quarter and deployed 2GW throughout the entirety of 2025, supported by a record quarterly capital expenditure of $37.5 billion. Securing a large, dedicated block of capacity in Texas would provide crucial resources for its Azure AI services and internal AI projects, ensuring it can meet soaring customer demand.

This potential transaction signals a strategic realignment of one of the industry's most-watched AI campus projects. It demonstrates how fluid partnership and tenancy agreements are in the fast-moving AI sector, where financial commitments and technological roadmaps can quickly change course. The entry of a cloud titan like Microsoft could solidify the Abilene campus as a key node in the nation's AI computing fabric, even as its original anchor tenant, OpenAI, looks to add capacity elsewhere.

Nvidia, Crusoe, and Microsoft declined to comment on the report.

Source: datacenterdynamics