OpenAI and Oracle have exhausted the resources for scaling their massive AI data center in Texas
Brief news
OpenAI and its computing resource partner Oracle have abandoned the previously planned expansion of the Stargate data center (DC) project in Abilene, Texas. The reason was a misunderstanding about financing and OpenAI leadership’s concerns over commitments.
What happened
| Stage | What happened | Who is involved | Planning |
|---|---|---|---|
| OpenAI and Oracle agreed to expand the existing DC from 1.2 GW to 2 GW (total project capacity – 4.5 GW). The financial plan was estimated at $300 bn. | OpenAI, Oracle | Difficulties | |
| Negotiations stalled due to financing problems and uncertainty about demand forecasts. Oracle stated a need for an additional $50 bn, but those funds did not arrive on time. | OpenAI, Oracle | New move | |
| After canceling the expansion, Crusoe continues construction of the current facility (1.2 GW). Meta claims unused and yet-to-be-built capacity for rent. Nvidia initially acted as a mediator and deposited $150 mln; now it has approached Meta with a joint-use proposal. | Crusoe, Meta, Nvidia |
Financial context
* The Stargate project started with a budget of $500 bn.
* The OpenAI‑Oracle collaboration was valued at $300 bn (4.5 GW).
* Significant debt financing is required to meet commitments; Oracle planned to raise an additional $50 bn.
Market impact
Meta continues to invest large sums in AI accelerators: in January Mark Zuckerberg announced a plan to spend up to $135 mln (≈ Kenya’s GDP). In 2026, the eight largest hyperscalers, including Google, Amazon, Microsoft, and others, plan to invest $710 bn in developing AI infrastructure.
Prospects for OpenAI
Despite the expansion failure, OpenAI still needs to deploy 5 GW of AI accelerators. Nvidia has allocated $30 mln to it as part of a new funding round (the total round is $110 bn, including investments from SoftBank and Amazon).
Conclusion
Financing difficulties led to the cancellation of the Stargate expansion, but new agreements with Meta and Nvidia’s support allow OpenAI to continue developing its AI infrastructure.
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