Oracle and OpenAI have abandoned plans to expand a flagship artificial intelligence data centre in Texas after negotiations stalled over financing and shifting requirements, according to a report by Bloomberg News citing people familiar with the matter.
The proposed expansion was linked to the massive Stargate AI infrastructure initiative, a project estimated to be worth as much as $500 billion and capable of delivering 10 gigawatts of computing power.
The initiative includes participation from SoftBank Group, OpenAI and Oracle. The project was unveiled by Donald Trump in January 2025.
Texas site expansion shelved
In September, the companies had announced plans to potentially add 600 megawatts of capacity near the flagship Stargate site in Abilene.
However, that expansion plan has now been scrapped. A source familiar with the matter told Reuters that the additional capacity will instead be fulfilled at other data centre campuses currently under development.
The existing Abilene site includes eight buildings, operated by Oracle Cloud Infrastructure, with two already operational, the source added.
Despite the change, the broader plan to develop another 4.5 gigawatts of data centre capacity remains on track.
Massive demand for AI computing
Technology companies are pouring billions into data centre infrastructure to support generative AI services such as ChatGPT and Copilot, which require enormous computing power and specialized chips.
The rapid growth of AI applications has intensified competition among cloud providers and chipmakers to secure large-scale computing facilities.
Meta Platforms explores opportunity
The breakdown in negotiations between Oracle and OpenAI has reportedly created an opening for Meta Platforms to step in.
According to Bloomberg, Meta is considering leasing the planned expansion site in Abilene from developer Crusoe Energy Systems.
Chip competition in the background
The discussions were reportedly facilitated by Nvidia, whose AI chips are already being used at the Stargate site.
The chipmaker is said to have intervened to ensure its processors power the expanded data centre rather than those from rival Advanced Micro Devices.
Oracle and OpenAI are currently relying on Nvidia’s AI semiconductors to run the computing infrastructure supporting their large-scale artificial intelligence workloads.
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