OpenAI and Oracle have canceled a major expansion of their Stargate AI data center campus in Abilene, Texas. The collapse followed failed negotiations over financing and OpenAI's fluctuating capacity needs, despite the broader partnership continuing.
The existing campus development proceeds, but it has faced operational issues, including cooling system failures. Meanwhile, Nvidia intervened to help secure Meta as a potential new tenant for the unused capacity, though Meta has not confirmed a deal.
The main topics covered are the canceled data center expansion, the reasons for the breakdown in negotiations, the site's reliability problems, and the potential involvement of Meta as an alternative tenant.
OpenAI's massive Stargate data center canceled as firm can't reach terms with Oracle, operator struggles with reliability issues — Meta said to be interested in snatching excess capacity
Too much ado, or Stargate has problems?
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Oracle and OpenAI have cancelled plans to expand their flagship AI data center campus in Abilene, Texas, after lengthy negotiations broke down over financing arrangements and OpenAI's changing capacity projections, reports Bloomberg. The Abilene campus is part of the Stargate project announced at the White House last year, and yet, it seems like it faces slowdowns. Just like other Oracle's data centers meant for OpenAI. Yet, Meta could take the yet-to-be-expanded space.
Since mid-2025, Oracle, Crusoe, and OpenAI have discussed increasing data center power capacity from about 1.2 GW to roughly 2.0 GW, amid reluctance from locals. Negotiations got complicated due to difficult financing terms and OpenAI’s shifting capacity forecasts, which led to their collapse, according to Bloomberg. Nonetheless, development of the 1,000-acre campus remains underway, and multiple facilities are already in service, though preliminary agreements to rent a substantial expansion were ultimately dropped. Could it be a signal that the Stargate project fails while the whole AI industry is on the rise?
The Abilene campus remains one of the biggest AI data center projects announced so far, yet to date, it has been known primarily as a part of the widely publicized Stargate project. Oracle has been rapidly installing Nvidia-based servers used by OpenAI to train and deploy AI models and systems. However, relations between Oracle and Crusoe have been strained by reliability issues. Earlier this year, winter weather disrupted parts of the liquid-cooling infrastructure, forcing several buildings offline for multiple days. Both companies say cooperation remains strong and development continues swiftly, yet the source report clearly notes hiccups.
Given the rising tensions between the Stargate partners, Crusoe began searching for another tenant, according to Bloomberg. At that point, Nvidia reportedly stepped in to help ensure the site would continue deploying its hardware rather than systems powered by AMD. Furthermore, Nvidia provided Crusoe with a $150 million deposit and assisted efforts to attract Meta — which is not a part of the Stargate project — as a prospective tenant for the additional capacity, the report says. Meanwhile, Meta has yet to confirm its expansion at the Abilene campus.
Despite shelving the expansion of one Stargate project, Oracle's general partnership with OpenAI remains unchanged. In July last year, Oracle agreed to develop 4.5 GW of data center capacity for OpenAI, and that program continues. The companies have also announced projects in other locations, including a site near Detroit owned by Related Digital.
*One gigawatt is comparable to the output of a nuclear reactor and can supply electricity to hundreds of thousands of homes at peak usage. That being said, a nuclear power plant was not reported to be a part of negotiations, which perhaps explains why locals were against increasing power capacity using things like coal or gas generators, yet we are speculating here.
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Anton Shilov is a contributing writer at Tom’s Hardware. Over the past couple of decades, he has covered everything from CPUs and GPUs to supercomputers and from modern process technologies and latest fab tools to high-tech industry trends.
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-Fran- Glad to see nVidia's attempt at greasing the cogs failed miserably.Reply
This is the 2nd or 3rd domino falling?
Regards.
Meridiano
