Key Takeaways
- Microsoft has secured a lease agreement for a 700-megawatt data facility located in Abilene, Texas, initially planned for Oracle and OpenAI
- The facility is positioned immediately adjacent to the Stargate campus operated by Oracle and OpenAI
- The tech giant finalized the arrangement with Crusoe, the project developer, after Oracle and OpenAI withdrew from lease negotiations
- An insider confirmed to Reuters that OpenAI’s current partnership terms with Oracle remain unaffected
- Oracle previously disputed media reports suggesting that capacity availability at the Abilene location faced delays, labeling such claims as false
Microsoft has taken control of a substantial Texas data center facility that Oracle and OpenAI declined to occupy, according to reporting from Bloomberg News released on Tuesday.
Microsoft has agreed to rent a data center project in Texas that was originally being developed for Oracle and OpenAI, sources say https://t.co/tNkuA1mUir
— Bloomberg (@business) March 24, 2026
The property is located in Abilene, Texas, and offers approximately 700 megawatts of power capacity. The site is positioned directly adjacent to the Stargate facility — the primary AI infrastructure initiative jointly developed by Oracle and OpenAI.
Microsoft finalized the leasing arrangement with Crusoe, the development company responsible for the Abilene facility. Both Oracle and OpenAI had previously withdrawn from discussions to lease the location before Microsoft entered negotiations.
A Microsoft representative told Reuters the company had no information to share publicly. Crusoe and Oracle declined to provide comments when contacted.
Bloomberg previously reported earlier in the month that Oracle and OpenAI abandoned expansion plans at the Abilene property. Discussions reportedly stalled due to funding complications and changing requirements from OpenAI.
Oracle contested that narrative, stating that reports about delayed capacity availability at Abilene were factually incorrect.
OpenAI’s Partnership With Oracle Remains Intact
A source with knowledge of the arrangement told Reuters that OpenAI’s current contractual obligations with Oracle continue unchanged — indicating this transaction doesn’t dissolve their broader collaboration.
This represents a nuanced yet significant clarification. Microsoft’s acquisition of the Abilene property doesn’t inherently indicate deteriorating relations between Oracle and OpenAI, at least based on that source’s account.
MSFT shares declined 2.69% during trading. Oracle (ORCL) dropped 4.42%.
The Battle for AI Computing Infrastructure
Major technology corporations have been rapidly expanding data center operations to accommodate AI-powered services. Microsoft’s Copilot platform and OpenAI’s ChatGPT both require massive computational power.
A 700-megawatt installation represents a substantial capacity increase. For context, such power levels can support dozens of thousands of AI processors operating at maximum capacity.
Microsoft has emerged as among the most aggressive investors in AI-related infrastructure, having allocated billions toward OpenAI and proprietary expansion efforts.
Acquiring a facility originally engineered for rival companies’ requirements is uncommon, though understandable considering the current scarcity of available data center capacity.
Crusoe, the project developer, focuses on environmentally sustainable computing infrastructure. The firm did not provide a response to Reuters’ inquiry.
The Abilene transaction has not received official confirmation from any involved parties. All information stems from Bloomberg’s reporting, which cited confidential sources.
Oracle’s Stargate facility continues operating next to the location Microsoft will now control — establishing Abilene as a significant concentration of AI computing power in western Texas.
As of Tuesday evening, Microsoft, Oracle, and OpenAI had not released official public statements regarding the transaction.
