The ambitious roadmap for one of the world’s largest artificial intelligence (AI) hubs has hit a pot hole. Oracle Corp. and OpenAI have scrapped plans to expand their flagship data center in Abilene, Texas, following a breakdown in negotiations over financing and shifting infrastructure requirements.
Collapse of expansion talks, part of the high-profile Project Stargate, has created a massive opening for Meta Platforms Inc., according to Bloomberg. Sources familiar with the matter indicate that Meta is already in discussions to lease the planned expansion site from developer Crusoe.
Meanwhile, in a move to protect its market dominance, NVIDIA Corp. has reportedly stepped in to facilitate the deal between Meta and Crusoe. To ensure the facility remains powered by its own H100 or Blackwell chips rather than hardware from rival AMD Inc., NVIDIA reportedly paid a $150 million deposit to Crusoe and began courting Meta as a replacement tenant.
While the core 4.5-gigawatt deal between Oracle and OpenAI remains on track elsewhere, the friction in Abilene highlights the volatility of the AI arms race.
Negotiations for the Abilene site, which aimed to raise capacity from 1.2 gigawatts to 2.0 gigawatts, reportedly soured due to several factors: sheer capital required to scale such massive infrastructure; fluctuating demand in OpenAI’s internal forecasting for compute needs; and reports of reliability issues at the site, including winter weather outages that affected liquid cooling systems earlier this year.
The news sent ripples through Wall Street on Friday. Oracle shares slipped 1.2%, while NVIDIA and AMD also saw declines as investors weighed the possibility of a cooling period in AI infrastructure spending.
Nonetheless, Oracle and Crusoe maintained a united front in official statements. “Together, Crusoe and Oracle are operating in lockstep to deliver one of the world’s largest AI factories,” Crusoe said, emphasizing that the existing Abilene project is progressing quickly.
As OpenAI shifts its expansion efforts to other locations, such as a site near Detroit, Meta appears ready to fill the vacuum. With a projected capital expenditure of $135 billion for 2026, Meta is aggressively scaling its capacity to keep pace with its rivals.
The Abilene project remains a symbol of the unprecedented scale of modern computing, harking back to the announcement of Project Stargate at the White House a year ago with executives from OpenAI, Oracle, and SoftBank in attendance. To put the project in perspective, a single gigawatt is roughly equivalent to the output of a nuclear reactor—enough to power 750,000 homes.
