Microsoft to Lease 700 MW Abilene, Texas Data Center From Crusoe, Beating Oracle and OpenAI

The Abilene site is among the highest-profile of the AI era, and will now feature two rivals, Microsoft and Oracle, on the same greater campus. Microsoft agreed to lease the roughly 700-megawatt data center project from developer Crusoe after both Oracle and OpenAI walked away from talks to occupy the site, according to people familiar with the situation who were granted anonymity to discuss a private matter.

The Abilene site, which accounts for roughly 700 megawatts of capacity, sits next to Oracle and OpenAI's flagship Stargate campus. The campus was first announced as part of the $500 billion Stargate project that kicked off at the beginning of 2025, and was set to provide up to 2GW of data center capacity to Oracle for use by OpenAI. However, the two companies scaled back the plans earlier this year, instead opting to call it quits at 1.2GW, or around eight data center buildings.

Earlier this month, Bloomberg News reported that Oracle and OpenAI had abandoned plans to expand an AI data center in Texas after negotiations dragged over financing and OpenAI's changing needs. Oracle later said the claims that planned capacity at the Abilene site is delayed were inaccurate. A source familiar with the matter told Reuters that there are no changes to OpenAI's existing agreements with Oracle.

Crusoe is a privately held AI infrastructure developer and GPU cloud provider that builds AI data center campuses and offers GPU cloud services in the United States. Crusoe's costs to build the Abilene campus are expected to reach about $12 billion, according to the company's co-founder and CEO Chase Lochmiller. For this project, Crusoe's direct customer had been Oracle, and OpenAI is Oracle's customer; the Abilene campus is tied to OpenAI's Stargate program. With Microsoft now stepping in as the tenant for the remaining capacity, Oracle has been rapidly filling buildings there with servers, which are used by OpenAI to train and deploy its products.

Microsoft recently committed about $50 billion to data center leases, a strategic acceleration compared to its previous decision to pause several data center projects. Meta had also considered leasing the facility, highlighting the intense competition for AI infrastructure. Microsoft ultimately secured the agreement, and the move carries notable strategic weight beyond raw capacity: it places Microsoft's compute infrastructure directly adjacent to the Oracle-OpenAI Stargate operation in west Texas.

Microsoft CEO Satya Nadella has offered a candid framing of the broader infrastructure moment. In a recent podcast, 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, and added that he is looking forward to renting capacity cheaply when that happens. Microsoft's willingness to absorb a project that two well-capitalized tenants passed on suggests the company views the current window as one where securing supply outweighs waiting for better terms.

A spokesperson for Microsoft said it had nothing to share, while Oracle and Crusoe did not immediately respond to comment requests. Oracle's Stargate facility continues to operate next to the property Microsoft is preparing to occupy, establishing Abilene as a significant hub for AI infrastructure in western Texas.