Oracle and OpenAI drop Texas data center expansion plan as AI infrastructure talks stall

March 6 (GeokHub) — Oracle and OpenAI have reportedly abandoned plans to expand a major artificial intelligence data center in Texas after negotiations over funding and technical requirements failed to reach agreement.

The proposed expansion was tied to the massive Stargate AI infrastructure initiative, a project expected to involve up to $500 billion in investment and 10 gigawatts of computing capacity aimed at supporting the rapid growth of artificial intelligence services.

The initiative, announced in 2025, involves several major technology players including SoftBank, OpenAI and Oracle.

Expansion plans change

The companies had previously discussed adding about 600 megawatts of additional data center capacity near the main Stargate campus located in Abilene, Texas.

However, those expansion plans have now been scrapped following lengthy negotiations and evolving infrastructure requirements from OpenAI.

Sources familiar with the discussions said the computing capacity originally planned for the Abilene expansion will instead be provided through other data center facilities currently under development.

Existing site continues operating

The Abilene campus remains a key part of the Stargate project.

The site includes eight data center buildings, with two already operational and managed by Oracle Cloud Infrastructure. Construction on additional capacity tied to the broader project is still moving forward.

OpenAI and Oracle are continuing work on plans to develop another 4.5 gigawatts of data center capacity elsewhere within the Stargate network.

AI demand driving massive infrastructure growth

Major technology companies are investing billions of dollars in data centers to support the growing demand for generative AI platforms such as chatbots, digital assistants and large language models.

These systems require enormous computing power, specialized chips and vast energy resources to operate.

Meta may step in

The stalled negotiations between Oracle and OpenAI may create an opportunity for another major tech company.

Meta Platforms is reportedly considering leasing the planned expansion site in Abilene from data center developer Crusoe.

Chipmaker Nvidia is said to have played a role in facilitating discussions, aiming to ensure its artificial intelligence processors remain the primary hardware used in the expanded facility rather than rival chips from other manufacturers.

Meta has not commented publicly on the reported discussions, while OpenAI and Nvidia have yet to issue responses.