Microsoft Leases Texas Data Center Abandoned by Oracle and OpenAI, Collaborates with NVIDIA on Nuclear Energy for AI

Microsoft is accelerating the expansion of its AI infrastructure, bringing competitors’ “discarded” assets into its fold.

According to Bloomberg, citing sources familiar with the matter, Microsoft has agreed to lease a data center project in Texas that was previously developed by Oracle and OpenAI, but both companies ultimately abandoned the negotiations. This move gives Microsoft another foothold in the AI data center race.

The project is located in Abilene, with a capacity of about 700 MW, adjacent to Oracle and OpenAI’s flagship “Stargate” campus. Bloomberg reports that Microsoft reached this deal with developer Crusoe. With Microsoft’s presence, this campus will host both Microsoft and Oracle, two major competitors.

Oracle and OpenAI Negotiations Break Down, Microsoft Takes Over

Earlier this month, Bloomberg reported that negotiations between Oracle and OpenAI over the Abilene project stalled due to funding disputes and OpenAI’s frequent changes in requirements, ultimately breaking down. OpenAI then announced it would switch to other data centers.

Bloomberg also cited sources saying that Meta Platforms had also discussed leasing the site. Previously, The Information reported that Microsoft was in talks with relevant parties regarding leasing arrangements. Ultimately, Microsoft reached this deal with Crusoe.

Microsoft Accelerates Data Center Expansion

This deal exemplifies Microsoft’s recent large-scale expansion of cloud computing and AI infrastructure.

In the past quarter, Microsoft signed approximately $50 billion in data center leasing commitments to meet the demands of cloud customers and internal AI research. This intensive deployment marks a clear strategic shift for Microsoft (about a year ago, Microsoft paused several data center projects).

After completing the deal, the Abilene campus will feature both Microsoft and Oracle co-located in a large facility, with the two companies competing in the cloud and AI markets. Currently, Oracle has rapidly deployed servers in the campus to support OpenAI’s model training and product deployment.

Microsoft and NVIDIA Announce AI Collaboration on Nuclear Energy

Microsoft and NVIDIA announced a collaboration on nuclear energy, aiming to develop tools for nuclear licensing and design.

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