Oracle, OpenAI Scrap Texas Data Center Expansion; Q2 Cloud Revenue Rises 68%
Oracle and OpenAI scrapped plans to expand their 1,000-acre Abilene, Texas AI data center after financing talks faltered, pushing shares down 1%. The company reported Q2 FY2026 infrastructure cloud revenue up 68% and RPO up 438% YoY to $523B, and forecasts up to $1.6B in restructuring charges with workforce cuts.
1. Scrapped Abilene Data Center Plans
Oracle and OpenAI ended plans to lease a large expansion at Crusoe’s 1,000-acre Stargate campus in Abilene, Texas, after financing and shifting needs stalled negotiations. Meta stepped in to negotiate leasing rights, supported by Nvidia’s $150 million deposit to secure chip placement.
2. Q2 Cloud Revenue and RPO Growth
In Q2 FY2026, Oracle’s infrastructure cloud revenue jumped 68% year-over-year, and remaining performance obligations surged 438% to $523 billion, reflecting accelerated demand for its AI and cloud services pipeline. These metrics underscore significant growth momentum despite the recent data center setback.
3. Restructuring Charges and Workforce Cuts
The company has announced up to $1.6 billion in restructuring charges tied to workforce reductions and automation investments, targeting less-essential roles as AI tools reshape operations. This restructuring is expected to weigh on near-term cash flow while aligning costs with long-term cloud investment priorities.