Microsoft snaps up Texas data center that Oracle and OpenAI left behind

Microsoft has agreed to lease a data center in Abilene, Texas, that was originally built for Oracle and OpenAI, Bloomberg News reports. The facility offers roughly 700 megawatts of capacity and sits right next to the Stargate campus - Oracle and OpenAI's flagship AI infrastructure project.

Microsoft struck the deal with developer Crusoe after both Oracle and OpenAI walked away from negotiations over the site. Back in March, Bloomberg reported that Oracle and OpenAI had abandoned their expansion plans in Texas because financing talks stalled and OpenAI's needs had shifted. Oracle pushed back on those reports at the time, calling claims of delays at the Abilene site inaccurate.

Microsoft, Oracle, OpenAI, and Crusoe have not commented on the new report, according to Reuters.

The lease aligns with Microsoft's broader push to expand its own computing infrastructure. In a recent podcast, Microsoft CEO Satya Nadella said he expects an oversupply of computing capacity and falling prices by 2027 or 2028 as a result of the current data center building boom. Nadella added that he's looking forward to renting capacity cheaply when that happens.