After denying delay in data centre project with OpenAI for months, Oracle goes ahead and scraps it

Oracle and OpenAI have scrapped plans to expand their flagship Stargate data centre in Abilene, Texas, after months of failed negotiations over financing and shifting demand. The collapse comes despite Oracle repeatedly insisting its OpenAI relationship was on track. The company now sits on over $100 billion in debt, faces potential layoffs of up to 30,000 employees, and has seen its stock halve since September 2025.

Oracle and OpenAI have abandoned plans to expand their flagship AI data centre in Abilene, Texas—a key site under the much-publicised Stargate initiative—after negotiations over financing and OpenAI’s shifting capacity demands dragged on for months without resolution, Bloomberg reported on Thursday.The collapse comes after Oracle spent weeks publicly insisting that its relationship with OpenAI was rock-solid. In early February, the company posted on X that a stalled Nvidia-OpenAI investment deal had “zero impact” on its financial ties with Sam Altman’s company. That post, rather than calming investors, sent Oracle shares sliding nearly 3%. Venture capitalist Alex Kolicich called it “literally bank-run language.

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Oracle and Crusoe had been in talks since mid-2025 to nearly double the Abilene site’s capacity

The Abilene campus, developed by Crusoe, is among the highest-profile data centre projects announced under Stargate. Oracle, Crusoe, and OpenAI had been negotiating since mid-2025 to expand the facility from 1.2 gigawatts to roughly 2 gigawatts. But the talks kept stretching—complicated by financing hurdles and what Bloomberg described as OpenAI’s “often-changing demand forecasting.”The 1,000-acre site isn’t dead entirely. Several buildings are already operational, and Oracle’s broader deal with OpenAI to develop 4.5 gigawatts of data centre capacity across multiple US locations remains intact, according to both Bloomberg and Reuters. But the Abilene expansion specifically is off the table. The collapsed talks have reportedly created an opening for Meta to step in and consider leasing the expansion site from Crusoe.

Reliability issues at the Abilene site added to the strain between Oracle and Crusoe

Bloomberg also reported that relations between Oracle and Crusoe have been strained by reliability problems at the site. Earlier this year, data centre buildings went offline for days after winter weather affected some of the liquid cooling machinery. In a statement, Oracle said it is “very proud of our relationship and our progress in bringing capacity online”—notably making no mention of OpenAI. Crusoe, for its part, said the two companies are “operating in lockstep” to deliver one of the world’s largest AI factories in Abilene.

Oracle’s $300 billion OpenAI bet has left it buried under $100 billion in debt

The broader picture for Oracle remains rough. The company has racked up over $100 billion in debt building out AI infrastructure, and its stock has lost roughly half its value since peaking in September 2025—wiping out around $463 billion in market cap. Investment bank TD Cowen flagged this week that Oracle may cut 20,000 to 30,000 jobs to free up cash, and S&P Global has placed the company’s credit rating on negative watch.An earlier report by The Information revealed that the Stargate joint venture itself has been largely idle—with no staff hired, no ground broken, and OpenAI routing around it with bilateral deals. Oracle has not publicly commented on the layoff reports or financing difficulties.