OpenAI and Oracle Halt TX Stargate Expansion, Scrapping Planned Growth Initiative

OpenAI’s flagship “Stargate” compute platform was slated to double the power of its Abilene, Texas, campus from 1.2 GW to 2 GW, but the expansion has been shelved, Bloomberg reports citing sources familiar with the negotiations. The plan, which was part of a broader $500 billion “Stargate” initiative announced a year ago, depended on a joint financing effort between OpenAI and its compute partner Oracle. According to Bloomberg, the deal stalled because Oracle could not secure the additional debt and equity needed to fund the extra megawatts, while OpenAI’s CEO Sam Altman reportedly balked at committing to the capital‑intensive build‑out without a clearer demand forecast. The cancellation leaves the Texas site at its current 1.2 GW footprint, a capacity that Oracle still expects to monetize under its existing $300 billion lifetime contract with OpenAI, as reported by Bloomberg.

The vacuum created by the aborted expansion has attracted interest from Meta, which is reportedly in talks to lease the unbuilt capacity through the site’s developer, Crusade (spelled “Crusoe” in The Register). Bloomberg says Nvidia stepped in as an intermediary, placing a $150 million deposit on the future capacity before approaching “Zuckercorp” about a joint tenancy. If Meta secures the space, it would add to the company’s aggressive capital‑expenditure plan disclosed in its Q4 earnings call, where Meta pledged up to $135 billion for GPU‑heavy infrastructure—a figure roughly equivalent to Kenya’s GDP, according to Reuters. Meta’s appetite reflects a broader trend among the eight largest hyperscalers (Google, Amazon, Microsoft, Oracle, Tencent, Alibaba, Baidu and Meta), which collectively aim to spend $710 billion on data‑center capacity in 2026, per Reuters analysis.

Oracle’s financing scramble underscores the broader market pressure on cloud providers to fund massive compute builds. The company announced a $50 billion debt‑and‑equity raise this week, intended to back its data‑center expansion agenda, but Bloomberg notes the timing was insufficient to rescue the Texas project. Despite the setback, Oracle’s core contract with OpenAI remains intact; the $300 billion agreement envisions deploying 4.5 GW of compute across multiple sites, a figure that will still require substantial borrowing. Analysts cited by Reuters caution that the “Stargate” rollout will now hinge on Oracle’s ability to marshal capital in a tighter credit environment, potentially slowing the pace at which OpenAI can scale its model training infrastructure.

The abandonment also raises questions about OpenAI’s demand modeling. Bloomberg’s sources suggest Altman’s “fear of commitment” stemmed from uncertainty over how quickly enterprise customers would adopt the next generation of large‑language models. While OpenAI’s revenue has surged to $3.4 billion on a growing base of more than 2 million business users (as reported by The Information in a separate context), the company still faces a “forecasting gap” for the compute needed to sustain its roadmap, according to the Bloomberg briefing. The $30 billion incentive offered by Nvidia as part of its recent $110 billion funding round with SoftBank and Amazon—intended to secure 5 GW of GPU capacity for OpenAI—now appears more critical than ever, Reuters notes, as OpenAI must locate alternative sites to meet that target.

In the short term, the Texas stall may shift OpenAI’s build‑out strategy toward other regions, such as the Wisconsin site already under construction with Oracle and Vantage, which Reuters covered in a separate announcement. That facility is part of the broader plan to bring the total Stargate capacity close to 7 GW, roughly the output of seven large nuclear reactors, according to Wired. Whether the Abilene campus will ever be expanded depends on the convergence of financing, demand certainty, and the willingness of partners like Meta and Nvidia to lock in long‑term capacity. For now, the 2 GW expansion remains a “plan on the skids,” leaving OpenAI to pursue its growth through existing sites and new collaborations, while Oracle works to shore up the capital needed to keep its data‑center ambitions afloat.