OpenAI's Massive Stargate Data Center Canceled as Firm Can't Reach Terms With Oracle
Arthur T Knackerbracket writes:
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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