The progress of artificial intelligence chips is outpacing the construction of data centres, highlighting a significant risk to the AI sector and Oracle's growth driven by debt.
OpenAI has decided against expanding its collaboration with Oracle in Abilene, Texas, where the Stargate data centre is located, as it seeks clusters equipped with newer generations of Nvidia graphics processing units, according to a CNBC report.
Also Read: Oracle LayOffs 2026: Who Will Get Affected, Why Is Tech Giant Cutting Jobs — All You Need To Know
Blackwell processors to be used in AI facility
The existing Abilene facility is set to utilise Nvidia's Blackwell processors, but the power is not anticipated to be operational for another year. By that time, OpenAI aims to have achieved greater access to Nvidia's next-gen chips in more extensive clusters elsewhere, said the source, who stayed anonymous.
Rumors of halting AI facility expansion
Bloomberg reported regarding the companies halting their expansion plans in Abilene. In a statement posted on X on Sunday, Oracle described the media reports concerning the developments as 'false and incorrect', although the statement merely confirmed that ongoing projects are proceeding as planned and did not comment on future expansion intentions.
Recent media activity about the Abilene site are false and incorrect. First, Crusoe and Oracle are operating in lockstep to deliver one of the world's largest AI Data centers in Abilene at record-breaking pace. Two buildings are completely operational and the rest of the campus…
— Oracle (@Oracle) March 9, 2026
Oracle secured the location, procured the hardware, and invested billions in construction and personnel, anticipating a larger scale of operations
The Vera Rubin, revealed at CES in January and already in production, offers five times the inference performance compared to Blackwell. Current CEO Jensen Huang has the firm releasing a new generation annually, with each iteration providing a significant enhancement in capability.
Oracle's funding dried up
Oracle faces a unique hurdle as it remains the sole hyperscaler, primarily financing its expansion through debt, amounting to a staggering $100 billion and still rising, reports said. In contrast, Google, Amazon, and Microsoft are banking on their massive cash-generating operations.
Also Read: OpenAI Raises $110 Billion Funds From Amazon, Nvidia, SoftBank
At the same time, Oracle's partner Blue Owl has decided against financing an additional facility and intends to reduce its workforce by up to 30,000 employees.
Oracle in negative cash flow
Oracle will unveil its fiscal third-quarter results, and stakeholders will be intently watching how the company tackles a $50 billion capital expenditure initiative amid negative free cash flow, and if the financing pipeline can sustain itself.
For firms developing frontier models, even the slightest enhancement in performance could lead to significant disparities in model benchmarks and rankings, which are closely monitored by developers and directly impact usage, revenue, and valuation.
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