Oracle and OpenAI Texas AI datacentre expansion stalls amid financing concerns

But worry not, Meta and Nvidia have stepped in to fill the gap

Oracle and OpenAI have reportedly shelved plans to expand their flagship AI datacentre in Abilene, Texas after financing talks stalled and disagreements emerged over demand forecasts, raising further questions about the sustainability of Big Tech’s AI infrastructure spending.

Oracle and OpenAI have reportedly abandoned plans to expand a flagship artificial intelligence data centre in Texas which was to sit at the heart of the $500 billion Stargate initiative.

Bloomberg reported that the plans were left on the shelf after negotiations failed to progress on financing and the matter of OpenAI’s reluctance to provided demand forecasts.

It was only in September 2025 that Oracle and OpenAI said that they planned to grow the eight-building facility in Abilene, Texas, facility to ‘up to’ 2 gigawatts of capacity. The site currently has an approximate 1.2GW capacity.

The agreement that Oracle will build out 4.5GW of infrastructure to fuel the apparently insatiable demand for OpenAI’s LLM development has been viewed with more than a little scepticism by commentators and investors.

Oracle only recently announced plans to raise an additional $50 billion in debt and equity to finance its datacentre building plans which is hard to view in isolation from the fact that the company already has a debt-to-equity ratio of more than 500%.

The companies both claim that the overall $300 billion deal to build infrastructure for OpenAI is still on track.

Bloomberg has also reported that the company is preparing significant job cuts to keep the money flowing into infrastructure.

In what looks like yet more evidence of the circular finding model propping up AI infrastructure spending the collapse in talks between Oracle and OpenAI created an opportunity for Meta to step in after Nvidia reportedly stepped in with a $150 million deposit for developer Crusoe.

Meta announced earlier this year that it intended to spend up to $135 billion into capital expenditure in 2026 alone. It isn’t alone in its spending ambitions.

Taiwan-based analyst TrendForce estimated earlier this year that the world's eight biggest cloud providers – Google, Amazon, Meta, Microsoft, Oracle, Tencent, Alibaba, and Baidu – will spend north of $710 billion in capital expenditure this year – an increase of 61 percent on 2025.

Computing says:

At the time of writing the price of a barrel of Brent crude has spiked at nearly $120 and is currently trading at around $106 as a result of the Iran war.

It will be interesting to see whether the huge hike in energy costs lurking in our near future will have an impact on how much Big Tech is spending on fuelling energy intensive AI datacentres.