Microsoft takes over Texas AI data center expansion as OpenAI backs away

Microsoft has stepped in to expand a major AI data center complex in Abilene, Texas, after OpenAI decided against further development at the site. Data center developer Crusoe announced Friday that it is collaborating with Microsoft to construct two new "AI factory" buildings and an accompanying 900-megawatt power plant. These additions will sit alongside an existing, even larger computing campus that Crusoe is building for OpenAI and Oracle. This expansion will bring the total number of data center buildings at the Abilene site to ten, with a projected computing capacity of 2.1 gigawatts. The complex, originally envisioned for cryptocurrency mining, pivoted to AI after the boom spurred by technologies like ChatGPT. OpenAI, which still holds a 27% stake in Microsoft, confirmed its decision to pursue additional capacity in other locations across the United States, including one with Oracle in Wisconsin, despite its "Stargate" project being one of the largest AI data center campuses. Crusoe co-founder and CEO Chase Lochmiller emphasized the new power plant's role in building the "industrial foundation for American AI." The existing OpenAI and Oracle project is supported by a 350-megawatt gas-fired plant and draws primarily from the regional electricity grid, which includes wind power. The increasing energy demands of AI data centers, particularly their reliance on gas, oil, and coal, raise concerns about greenhouse gas emissions and complicate tech companies' climate commitments.