OpenAI Abilene Expansion Canceled as Microsoft Builds 2.1GW Campus Nearby
Abilene, Texas was supposed to host the largest AI data center campus on earth. OpenAI and Oracle's joint Stargate project, visited by Sam Altman personally and billed as a marvel of modern engineering, was meant to stretch across the west Texas flatlands powered by a dedicated gas-fired plant. Today, according to The Register, only about 200 megawatts of that 1.2 gigawatt project has been powered on. The rest exists on paper.
What replaced it tells you something about where AI infrastructure power has actually accumulated. Crusoe, the data center developer that was building the OpenAI/Oracle project, announced Friday it is working with Microsoft to build two new AI factory buildings and an on-site power plant in Abilene, right next door to the site it was previously developing for OpenAI and Oracle. Crusoe co-founder and CEO Chase Lochmiller said in a written statement that the new power plant will be able to generate 900 megawatts. When complete, Microsoft's Abilene footprint will total 10 data center buildings supplying 2.1 gigawatts of computing capacity, a number that would have sounded fictional three years ago.
The Oracle and OpenAI expansion was canceled because of financing challenges and OpenAI's frequently changing demand forecasts, Data Center Dynamics reported, citing Bloomberg. OpenAI has around $600 billion in projected compute spend by 2030, down from an earlier $1.4 trillion pledge by 2033. Those two numbers are the most concrete evidence yet that the scaling trajectory OpenAI was pitching to investors and partners has been revised sharply downward, not gradually.
The departure had a human face. OpenAI's director of physical infrastructure, Keith Heyde, abruptly left the company earlier this year, Data Center Dynamics reported. Heyde had been a vocal internal advocate for OpenAI's in-house data center strategy, a sign that the company's pivot toward cloud contracts — buying compute from Microsoft, Google, and CoreWeave rather than building its own facilities — was not uncontested.
Operational trouble compounded the strategic problems. A multi-day outage caused by winter weather damaging liquid cooling equipment at the Crusoe site damaged relations between OpenAI and Crusoe, according to Data Center Dynamics. It is the kind of failure that doesn't show up in partnership memos or funding decks but matters when you're trying to keep a data center running through a Texas winter.
Nvidia paid a $150 million deposit to Crusoe to secure the site and is in talks with Meta to take up capacity there, Data Center Dynamics reported. The deposit is a signal: in the current AI infrastructure race, securing physical space and power is at least as competitive as securing GPU allocations. A rival chipmaker pre-paying to lock in access to infrastructure built for someone else is not a normal commercial gesture.
Microsoft's position in this story is structurally unusual. Microsoft was once OpenAI's exclusive cloud computing provider and still holds roughly 27 percent of the ChatGPT maker, a stake currently valued at around $135 billion. That makes Microsoft simultaneously the largest external funder of the company it is now building competing infrastructure around. The company that wrote OpenAI its early checks is positioning itself as the physical landlord for the entire AI industry, regardless of who the tenant is.
The power plant numbers are the starkest illustration of the gap between announcement and execution. The new Microsoft/Crusoe plant will generate 900 megawatts. The existing OpenAI/Oracle facility has a 350-megawatt gas-fired plant. When Altman visited Abilene last year, he said: "We're burning gas to run this data center," adding that the long-term hope for Stargate was to rely on other power sources. That hope hasn't arrived yet. The gas is burning now.
The remaining gigawatt of the 1.2 gigawatt OpenAI/Oracle project should come online throughout 2026, according to Crusoe's public statements. What remains to be seen is who it belongs to.
Microsoft and OpenAI declined to comment. Oracle did not respond to a request for comment as of publication.
† † Source-reported; not independently verified.