Oracle Denies Reports of Scrapping Texas AI Data Centre Expansion
Oracle has strongly pushed back against recent media reports claiming it has abandoned plans to expand a flagship artificial intelligence data centre in Abilene, Texas. In a public statement, the company labelled the coverage as "false and incorrect," asserting that it remains committed to the project.
Company Confirms Operational Status and Partnership
In a post on social media platform X, Oracle clarified that it and developer Crusoe are "operating in lockstep" to deliver one of the world's largest AI data centres at the site. The company confirmed that two buildings are already fully operational, with the rest of the campus development proceeding as scheduled.
This statement came hours after a Bloomberg report suggested Oracle and OpenAI had scrapped negotiations to nearly double the facility's capacity from 1.2 gigawatts to approximately 2 gigawatts. According to the report, financing discussions and OpenAI's shifting demand forecasts led to the collapse of expansion talks.
Broader Context and Financial Implications
Oracle's post did not directly address the specific claims in the Bloomberg report but referenced its broader commitment to OpenAI. The company stated it has "completed leasing for the additional 4.5GW to deliver on our commitments to OpenAI," referring to a mid-2025 agreement to develop 4.5 gigawatts of data centre capacity across multiple U.S. locations.
The Abilene campus represents a key component of the Stargate initiative, announced at the White House in January 2025 with prominent figures including President Donald Trump, Sam Altman, Masayoshi Son, and Larry Ellison. However, the project has faced significant challenges:
- Stalled timelines and financing difficulties
- Disagreements among partners over control and ownership
- Reliability issues at the Abilene site, including reported outages from winter weather affecting cooling systems
Oracle's aggressive AI infrastructure expansion has come at substantial financial cost. The company has accumulated over $100 billion in debt to fund its data centre buildout, contributing to a roughly 50% decline in stock value since September 2025—erasing approximately $463 billion in market capitalization.
Market Reactions and Future Outlook
Financial markets have reacted negatively to Oracle's mounting debt and operational challenges. S&P Global has placed Oracle's BBB credit rating on negative watch, with some bonds trading at levels typically associated with junk debt. Investment bank TD Cowen estimates Oracle may need to cut 20,000 to 30,000 jobs to generate $8–10 billion in cash flow, with potential layoffs reportedly beginning as early as this month.
Meanwhile, the collapsed expansion talks have reportedly opened opportunities for other tech giants. Bloomberg indicated Meta is considering leasing the expansion site from Crusoe, with Nvidia reportedly providing a $150 million deposit to facilitate this potential arrangement.
Oracle maintains a forward-looking stance, stating: "We continuously evaluate sites around the world to meet the growing demand for OCI by working with great partners and customers all the time." The company is scheduled to report fiscal third-quarter earnings on March 10, which may provide further clarity on its financial health and strategic direction.
