OpenAI, Oracle scrap plans to expand flagship data center
What's the story
Oracle and OpenAI have scrapped their plans to expand a major artificial intelligence (AI) data center in Texas. The decision comes after protracted negotiations over funding and the evolving requirements of OpenAI, according to Bloomberg. The expansion was part of the Stargate initiative, a project of up to $500 billion and 10 gigawatts that also involves SoftBank Group and Oracle.
Project details
Stargate initiative was announced by Trump
The Stargate initiative was announced by US President Donald Trump in January 2025. In September, Oracle and OpenAI had revealed plans for an additional potential expansion of 600 megawatts near the main Stargate site in Abilene, Texas. However, this capacity will now be fulfilled at one of the other data center campuses under construction, a source familiar with the matter told Reuters.
Operational status
Tech companies investing in data centers
The Abilene site, which has eight buildings operated by Oracle Cloud Infrastructure, already has two up and running. Despite the setback in expansion plans, OpenAI and Oracle's plan to develop another 4.5 gigawatts of data center capacity remains on track. This is part of a larger trend where tech companies are investing heavily in data centers to support generative AI services like ChatGPT and Copilot that require massive computing power.
Potential lease
Meta to lease proposed expansion site in Abilene
The stalled talks between Oracle and OpenAI have opened the door for Meta Platforms to consider leasing the proposed expansion site in Abilene, Texas. The move would be with developer Crusoe, according to Bloomberg. NVIDIA played a key role in these discussions, ensuring its AI semiconductors are used at the Stargate site instead of those from rival Advanced Micro Devices (AMD).