Microsoft is moving into Abilene, Texas's sprawling Stargate data center campus after OpenAI backed away from a planned expansion, reshuffling who will occupy some of the most hotly contested compute space in the country. The tech giant will become a direct neighbor to the existing OpenAI-Oracle installations, while developer Crusoe says the new deal layers on two additional "AI factory" buildings and a major on-site power plant.
Crusoe said Friday that it is working with Microsoft on those two new AI-focused buildings and an on-site power plant, according to AP News. The company told AP that the plant could generate about 900 megawatts and that Microsoft's additions would bring the campus to 10 data center buildings and roughly 2.1 gigawatts of compute capacity. Crusoe co-founder Chase Lochmiller said in a written statement that the new plant will continue building the industrial foundation for American AI - at a velocity the industry has never seen.
How the campus got here
Before Microsoft entered the picture, Crusoe had already finished two buildings on the site and had begun a second phase that would add six more structures and around 1.2 gigawatts of capacity, according to a company announcement. The March 2025 release said the Lancium Clean Campus expansion was designed to support high-density Nvidia racks and was expected to be energized in stages through mid-2026, Crusoe noted. That earlier buildout helps explain how Microsoft can slide into capacity that was already under construction.
Oracle and OpenAI walked away from plans to expand the site earlier this month after financing talks fell apart and OpenAI's demand forecasts shifted, creating an opening for other tenants to compete for space, as reported by The Dallas Morning News. Bloomberg reporting cited in that coverage said Nvidia even put down a deposit to help line up a replacement tenant, a reminder that chipmakers are now acting as matchmakers in the AI compute arms race. The unraveling shows how quickly giant AI projects can be reshaped by financing terms and hardware dynamics.
Power and local trade-offs
The Microsoft-linked expansion is also turning up the heat on questions about power and emissions. Crusoe said the new plant would be able to generate about 900 megawatts, making it larger than the roughly 350-megawatt gas-fired plant tied to the OpenAI/Oracle portion of the campus, and those behind-the-meter generation plans complicate corporate climate pledges, according to AP News. OpenAI CEO Sam Altman acknowledged during a visit that "we're burning gas to run this data center" even as companies say they intend to add renewables and storage over time.
On the ground in Abilene, residents say the campus has already strained housing, roads and basic services as thousands of out-of-state construction workers poured in, driving up rents and filling motels and RV parks, according to reporting by Time. Local officials have scrambled to arrange emergency lodging and warned that long-term benefits for the community are far from guaranteed.
Industry analysts say what is playing out in Abilene is part of a broader pattern in which hyperscalers race to lock in compute capacity while butting up against grid constraints, financing friction and supply-chain bottlenecks, a dynamic chronicled by DataCenterDynamics. The "AI factory" model can speed deployment, but it also concentrates environmental and social trade-offs in the communities that host these mega-campuses.
Crusoe and Microsoft have not yet released a public construction timetable for the Microsoft buildings or the 900-megawatt plant. The developer had previously said the next phase of Abilene's expansion would be energized in stages through mid-2026, according to the company announcement. For Abilene, the Microsoft deal is a reminder that the AI infrastructure land grab is still very much in flux and that marquee projects can be repackaged quickly as demand and financing shift.
