Oracle and OpenAI drop Texas data center expansion plan, Bloomberg News reports

March 6 (Reuters) - Oracle and ‌OpenAI have abandoned ​plans ​to expand a flagship artificial intelligence data center in Texas after negotiations dragged over financing and OpenAI's changing needs, Bloomberg News ‌reported on Friday, citing people familiar with the matter.

The plan ⁠is part of the Stargate initiative, a project of up to $500 billion and 10 gigawatts ‌that includes SoftBank Group, ‌OpenAI and Oracle. It was announced by U.S. President Donald Trump in January 2025.

In September, the companies had announced plans for an additional potential expansion of 600 ​megawatts near the flagship Stargate site in Abilene, Texas.

That capacity will now be fulfilled at one of the other data center campuses being ⁠built, a source familiar with the matter told Reuters on Friday.

The Abilene site has eight buildings, ​which will be operated by Oracle Cloud Infrastructure, and two of them are already up and running, the source added. OpenAI and ​Oracle's plan to develop another 4.5 gigawatts of data ‌center capacity remains on track.

Technology companies have been pouring billions of dollars into data centers to power generative AI ⁠services such as ChatGPT and Copilot, which require huge amounts of computing power.

The collapsed talks between Oracle and OpenAI created an opening for Meta Platforms to step ⁠in and consider leasing the planned expansion site in Abilene, Texas, from developer Crusoe, ​according to the Bloomberg News report. Nvidia helped facilitate the discussions.

Oracle and OpenAI are using Nvidia's AI semiconductors at the Stargate site, and the chip designer stepped in ‌to make sure its products, rather than those of competitor Advanced Micro Devices, would be used to power the ‌expanded data center, the report said.

Meta declined to comment when contacted by Reuters. ⁠OpenAI and Nvidia did not ‌immediately respond to requests ​for comment.

(Reporting by Juby Babu in Mexico City and Jaspreet Singh in Bengaluru; Editing by Tasim Zahid, Sahal Muhammed and ‌Alan Barona)

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