OpenAI and Oracle abandon Texas data center expansion plan; media suggests Meta may take over, Nvidia involved.

Media reports say that Oracle and OpenAI have abandoned plans to expand a flagship AI data center in Texas, as negotiations dragged on too long over financing issues and OpenAI’s constantly changing requirements.

According to sources, the breakdown in talks created an opportunity for Meta to step in. Meta is considering leasing the expansion site in Abilene, Texas, from developer Crusoe. Sources indicate that Nvidia, the leading AI chipmaker, helped facilitate discussions between Meta and the developer.

Analysts believe this change in plans highlights the complexity of building AI data centers. Such projects are expected to require tens of billions of dollars in investment and complex coordination among multiple partners.

The data center park Crusoe is developing in Abilene is part of the highly anticipated "Stargate" project, which was announced last year at the White House by President Trump. Sources say that the 1,000-acre park is still under construction, with some facilities already operational, but Oracle and OpenAI ultimately decided not to proceed with the previously planned large-scale expansion leasing project.

Oracle and OpenAI are using Nvidia chips in the Stargate project. Sources say that as Crusoe looks for new tenants, Nvidia stepped in to ensure that the data center expansion would continue using its chip products, and not AMD’s competing products. Reportedly, Nvidia has paid Crusoe a $150 million down payment and has begun helping attract Meta as a tenant for the expansion project.

Last July, Oracle agreed to develop 4.5 gigawatts of data center capacity for OpenAI. That agreement is still proceeding as planned, and the two sides have also announced projects at several other sites—for example, a facility near Detroit owned by Related Digital.

On Friday, Oracle’s stock reversed earlier gains and closed down 1.11% at $152.96 in New York. Other companies involved in building AI infrastructure—such as CoreWeave, AMD, and Nvidia—also fell after the news was released.

Negotiations dragged on, changing financing and requirements led to partnership breakdown

The enormous computing power needed to train and deploy AI models is fueling an unprecedented boom in data center construction. Oracle has shifted its business strategy to focus on providing data center computing power for clients like OpenAI and Elon Musk’s xAI. Meta is also investing heavily in AI infrastructure for its products, expecting capital expenditures of up to $135 billion just in 2026. Nvidia remains the primary supplier of AI computing chips.

The data center in Abilene owned by Crusoe is among the most watched data center projects. Oracle is rapidly deploying servers in the facility, which OpenAI uses for training and running its AI products. Since mid-2025, Oracle, Crusoe, and OpenAI have been discussing expanding the facility’s capacity from 1.2 gigawatts to about 2.0 gigawatts. One gigawatt is roughly equivalent to the output of a nuclear reactor and can provide power for about 750,000 households at any given time.

Sources say the negotiations dragged on too long, with financing issues and frequent changes to OpenAI’s demand projections making talks complicated and ultimately leading to the breakdown in partnership.

Additionally, tensions arose between Oracle and Crusoe due to reliability problems at the project. Sources say that earlier this year, winter weather affected some liquid cooling equipment, causing the data center building to be offline for several consecutive days.

Both companies said their relationship remains strong and Oracle’s leasing project in Abilene is progressing rapidly.

Oracle stated:

“We are very proud of our partnership and the ongoing launch of computing power capacity.”

Crusoe stated:

“Crusoe and Oracle are working closely to build one of the world’s largest AI factories in Abilene. Our collaboration allows us to deliver hyperscale infrastructure faster than anyone else in the industry.”

Sources said that Meta’s negotiations with Crusoe over the Abilene expansion project are still ongoing and the situation may change. Currently, Meta is building several large data centers in Louisiana and Indiana. Last month, Meta also reached an agreement with AMD to deploy equipment totaling 6 gigawatts in scale.

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