We revealed earlier this week that plans for one of America’s most high-profile AI infrastructure projects were dramatically scaled back. Reports indicated that OpenAI and Oracle abruptly shelved their expansion of the flagship data centre campus in Texas.

The move would have marked a reversal for the tech giants just months after unveiling their ambitious $500 billion Stargate project. Last year Musk slammed the news that OpenAI had pledged to invest a whopping $500 billion in AI infrastructure with support from SoftBank, Microsoft, Oracle, and MGX., claiming it ‘doesn’t have the money’ to complete the project.

However Oracle has since hit back at the claims via a statement on X. “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 is on track. Second, Oracle has completed leasing for the additional 4.5GW to deliver on our commitments to OpenAI. We continuously evaluate sites around the world to meet the growing demand for OCI by working with great partners and customers all the time.”

Oracle job cuts signal pressure behind AI spending

The news comes at a delicate moment for Oracle, which is attempting to balance aggressive AI investment with mounting financial pressure.

The company has been considering substantial workforce reductions that could affect tens of thousands of employees as it attempts to control costs and redirect capital towards AI infrastructure. Oracle follows the lead of many technology giants, including Telstra, Salesforce, Amazon, Meta and Ericsson, which have all recently made job cuts.

Analysts say the potential layoffs reflect the enormous capital intensity of building large AI data centres.

For Oracle, which has positioned its cloud division as a key provider of AI capacity for partners including OpenAI, the challenge lies in scaling infrastructure quickly enough while maintaining financial discipline.

Investors have already shown signs of caution. The company’s shares fell after reports emerged that the Texas expansion would not proceed, reflecting concerns about the pace and cost of the AI build-out.