Oracle drops after report that it and OpenAI scrapped plans to expand a data center site in Texas
Nvidia helped line up Meta as a new tenant for the location.
Oracle shed its ample gains to turn negative after Bloomberg reported that the cloud giant and OpenAI jettisoned plans to expand a data center site in Texas that is a part of Project Stargate, citing people familiar with the matter.
The article says that the plans to increase capacity from 1.2 gigawatts to roughly 2 gigawatts broke down “after negotiations dragged over financing and OpenAI’s changing needs.”
It’s a sign that the financing demands of the AI boom are causing some of its biggest players to make some tough business decisions and pare their investment ambitions.
Meanwhile, another large player is willing to step into the void: Meta is reportedly in talks to lease the expanded location, with Nvidia having helped arrange the social media company’s negotiations with developer Crusoe, per the report.
As a result, Nvidia’s GPUs will serve as the brains of the expanded operation, rather than Advanced Micro Devices, the No. 2 in AI GPUs, according to Bloomberg. The chip designer was said to have paid a $150 million deposit to Crusoe ahead of its discussions with Meta.
Nonetheless, shares of Nvidia hit session lows following this report, as did AMD. The thinking here is presumably that any weakness in demand from colossal AI spenders is a negative for all the upstream players in the ecosystem.
