Microsoft takes over a Texas AI data center expansion after OpenAI backs away

Microsoft is taking over a data center construction project in Texas after OpenAI declined to pursue it, in a move that will make the two companies neighbors at one of the nation's largest complexes for running artificial intelligence.

Data center developer Crusoe said Friday it is working with Microsoft to build two new “AI factory” buildings and an on-site power plant in Abilene, Texas, right next to where Crusoe has been building an even larger computing campus for OpenAI and Oracle.

OpenAI's existing project, the flagship of a broader initiative called Stargate, is so massive that President Donald Trump was the first to officially announce it just after his inauguration last year to signal AI investments he called a “resounding declaration of confidence in America’s potential.”

Microsoft was once OpenAI's exclusive cloud computing provider and still holds a roughly 27% stake in the ChatGPT maker, but the two companies are increasingly pursuing AI development separately, even though they are on the same tract of land.

Crusoe has already completed two buildings for OpenAI and its other cloud partner, Oracle, supplying a surge of computing power that helps build and operate technology like ChatGPT. SoftBank was also an investment partner. Crusoe is still completing six more buildings for OpenAI and Oracle due to be completed by the end of this year.

OpenAI said earlier this month that it dropped plans to expand its Abilene project even further.

“Our flagship Stargate site is one of the largest AI data center campuses in the United States,” said Sachin Katti, OpenAI's head of compute infrastructure, in a post on X. “We considered expanding it further, but ultimately chose to put that additional capacity in other locations.”

Katti said OpenAI has more than half a dozen sites under development across the United States, including one it is building with Oracle in Wisconsin.

Microsoft’s additional two Abilene facilities announced Friday will bring the total number to 10 data center buildings, expected to supply a stunning 2.1 gigawatts of computing capacity from what was once a vast tract of mesquite shrub lands, home to coyote and roadrunners.

Originally planned as a facility to mine cryptocurrency, developers pivoted and expanded their designs after ChatGPT sparked an AI boom.

Crusoe co-founder and CEO Chase Lochmiller said in a written statement that a new power plant attached to the Microsoft project will be able to generate 900 megawatts to “continue building the industrial foundation for American AI — at a velocity the industry has never seen.”

That will be larger than the existing 350-megawatt, gas-fired power plant attached to the OpenAI and Oracle project. Oracle has previously described that on-site plant as a backup source of power, since the data centers primarily draw from the region's electricity grid, which includes power supplied by nearby wind farms.

The AI race has been complicating tech companies’ commitments to reduce greenhouse gas emissions, most of which come from the burning of gas, oil and coal and drive climate change. “We’re burning gas to run this data center,” OpenAI CEO Sam Altman said while visiting Abilene last year, adding that “in the long trajectory of Stargate” the hope is to rely on many other power sources.

FILE - Mahesh Thiagarajan, executive vice president of Oracle Cloud Infrastructure, shows media the Stargate artificial intelligence data center project in Abilene, Texas on Sept. 23, 2025. (AP Photo/Matt O'Brien, File)

FILE - Vikas Parekh, managing partner at SoftBank Investment Advisers, at left, and Crusoe CEO Chase Lochmiller, at right, at the Stargate artificial intelligence data center campus in Abilene, Texas, on Sept. 23, 2025. (AP Photo/Matt O'Brien, File)

FILE - This aerial photo shows an entrance to the Stargate artificial intelligence data center complex in Abilene, Texas on Sept. 22, 2025. (AP Photo/Matt O'Brien, File)

DENVER (AP) — Thousands of striking workers at one of the nation's largest meatpacking plants will extend their walkout to a third week as they push for higher wages and better health care.

Industry experts said it’s too early to know if the strike that began March 16 at the Swift Beef Co. plant in Greeley, Colorado, will impact beef prices for shoppers.

Owner JBS USA said Friday that it's operating the plant at limited capacity and has shifted beef production elsewhere to meet its customers needs.

With negotiations stalled, the company remains in a strong position relative to the striking workers, said Jennifer Martin at Colorado State University’s animal sciences department.

That's because the industry is suddenly less burdened by excess slaughter capacity that had been keeping profit margins low. Now amid the Greeley strike and other slaughter plant capacity reductions — including the closure of a major Tyson Foods’ plant in Nebraska — JBS and other companies are seeing profits increase, Martin said.

“It’s not necessarily in favor of the employees,” she added. “The lack of harvest capacity at one facility right now might actually be a benefit to the larger industry in the sense of improving (profit) margins.”

It’s the first strike at a U.S. slaughterhouse since workers walked out at a Hormel plant in Minnesota in 1985. That strike lasted more than a year and included violent confrontations between police and protesters.

The Greeley strike began March 16 with support from 99% of the plant’s 3,800 workers who belong to the United Food and Commercial Union Local 7 union. Thousands have showed up at the picket line over the past two weeks.

Union officials say the company’s offer of 2% wage hikes is less than inflation.

“The Union stands ready to meet with JBS at any time, but make no mistake, workers will continue to fight until JBS rights these wrongs,” union President Kim Cordova said.

JBS is the world’s largest meatpacking company with a market capitalization of $17 billion. It's the top employer in Greeley, a city 50 miles (80 kilometers) northeast of Denver with a population of about 114,000 people.

“We are maintaining supply, supporting the long-term stability of the beef chain, and minimizing disruption for producers, customers, and consumers,” JBS spokesperson Nikki Richardson said in an email. “Our priority is to keep product moving while we work toward a resolution in Greeley.”

JBS was approved for trading on the New York Stock Exchange last May, despite environmental opposition and a federal probe that led to its guilty plea for bribing Brazilian officials for the financing it used for its U.S. expansion.

Brown reported from Billings, Montana.

FILE - Employees walk in front of the entrance to the JBS meat processing plant, July 23, 2021, in Greeley, Colo. (AP Photo/David Zalubowski, File)

Workers from the JBS Beef Plant protest across the road from the plant on March 16, 2026 in Greeley, Colo. Nearly 3800 workers with the United Food & Commercial Workers (UCFW) are on strike protesting unfair work conditions. (Jerilee Bennett/The Gazette via AP)