Microsoft (MSFT) Stock: Company Snaps Up Oracle and OpenAI’s Abandoned Texas Site

TLDR

• Microsoft has agreed to rent a 700-megawatt data center in Abilene, Texas, originally developed for Oracle and OpenAI
• The site sits directly next to Oracle and OpenAI’s flagship Stargate campus
• Microsoft struck the deal with developer Crusoe after Oracle and OpenAI walked away from occupying the site
• A source told Reuters there are no changes to OpenAI’s existing agreements with Oracle
• Oracle had previously pushed back on reports that capacity at the Abilene site was delayed, calling them inaccurate

Microsoft is moving into a Texas data center that Oracle and OpenAI left on the table, according to a Bloomberg News report published Tuesday.

The site is in Abilene, Texas, and carries roughly 700 megawatts of capacity. It sits right next to the Stargate campus — Oracle and OpenAI’s flagship AI infrastructure project.

Microsoft struck the rental deal with Crusoe, the developer behind the Abilene project. Oracle and OpenAI had both walked away from talks to occupy the space before Microsoft stepped in.

Microsoft Corporation, MSFT

A spokesperson for Microsoft told Reuters it had nothing to share. Oracle and Crusoe did not respond to requests for comment.

Bloomberg had reported earlier this month that Oracle and OpenAI dropped plans to expand at the Abilene site. Negotiations reportedly dragged due to financing issues and shifting needs on OpenAI’s side.

Oracle pushed back on that account, saying claims that planned capacity at Abilene was delayed were inaccurate.

OpenAI’s Oracle Agreements Unchanged

One source familiar with the situation told Reuters that OpenAI’s existing agreements with Oracle remain in place — meaning this deal does not unwind their broader partnership.

It’s a subtle but important distinction. Microsoft stepping into the Abilene site doesn’t necessarily signal a breakdown between Oracle and OpenAI, at least according to that account.

MSFT stock was down 2.69% on the day. Oracle (ORCL) fell 4.42%.

The Race for Data Center Capacity

Tech companies have been aggressively building out data center infrastructure to support AI services. Microsoft’s Copilot and OpenAI’s ChatGPT both demand enormous computing resources.

A 700-megawatt facility is no small addition. To put it in perspective, that kind of capacity can power tens of thousands of AI chips running at full load.

Microsoft has been one of the most active investors in AI infrastructure, having committed billions to OpenAI and its own internal build-out.

Taking on a site that was originally designed for a competitor’s needs is unusual, but not surprising given how tight data center capacity has become.

Crusoe, the developer, specializes in sustainable computing infrastructure. The company did not respond to Reuters’ request for comment.

The Abilene deal has not been officially confirmed by any of the parties involved. All details come from Bloomberg’s reporting, citing unnamed sources.

Oracle’s Stargate campus remains adjacent to the site Microsoft is now set to occupy — making Abilene a notable cluster of AI infrastructure in West Texas.

As of Tuesday afternoon, neither Microsoft, Oracle, nor OpenAI had issued formal statements on the matter.

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