Bloomberg Businessweek – March 6, 2026

Episode Title: Oracle and OpenAI End Plans to Expand Flagship Data Center
Hosts: Carol Massar & Tim Stenovec
Featured Guests: Ed Ludlow (Bloomberg Tech), Dr. Ellen Wald (Transversal Consulting & Atlantic Council), James Crombie (Bloomberg News), Sevesti Balafaz (GoldVest Advisory)

Episode Overview

This episode explores significant developments at the intersection of technology, energy, and finance:

• The abandoned plan by Oracle and OpenAI to expand their flagship Texas data center—and the broader story it tells about AI infrastructure investments.
• The swelling crisis in global energy markets, with the escalation of Middle Eastern conflict disrupting oil flows and threatening a new worldwide energy crunch.
• Current turmoil and risks in private credit markets, highlighting structural pressures and what investors need to know.
• Portfolio strategy amid volatility, with a focus on dividend stocks, defense sector plays, and the shifting role of software and international exposure.

The conversation is rapid, insightful, and at times candid—giving listeners a window into decision-making at the cutting edge of business and economics.

Oracle and OpenAI Data Center Expansion: A Turning Point

Segment Starts: [02:02]

Key Discussion Points

• Project Stargate and Abilene, TX Site

  • Oracle and OpenAI had planned to jointly expand a massive AI data center with Crusoe (developer) in Abilene, Texas, increasing its capacity from 1.2 to 2 gigawatts.
  • The expansion was scrapped after prolonged financing negotiations and shifting requirements from OpenAI.

• What’s Really Happening?

  • "Is this an AI spend story? Is this an Oracle story or a little bit of both?" – Host 1, [02:18]
  • Ed Ludlow explains the complexity:

    “Data centers are difficult to build...It’s a 1000-acre site...Oracle had an agreement with Crusoe, the developer, and OpenAI...but they've decided not to take on that additional capacity. Nvidia has kind of acted as a broker...early talks happening between Matter and Crusoe to take on that additional bit.”
    (Ed Ludlow, [02:41])

• Nvidia’s Involvement & Market Effects

  • Nvidia paid Crusoe a $150M deposit to secure placement of its GPUs—blocking AMD from the expansion, which weighed on both AMD and Nvidia shares.
  • “It was basically a deposit to ensure that whatever happens...it’s Nvidia GPUs that are in it and not AMD's.” (Ed Ludlow, [04:05])

• What It Means for the ‘Neo Clouds’ and the Broader AI Infrastructure Buildout

  • Pause in flagship expansion raises questions about the pace and momentum of AI datacenter construction, core to the so-called "Neo Cloud" providers like CoreWeave:

    “...if you see a story about a high profile data center site that is kind of going off track...the market is looking at going, you know, maybe this, this build out doesn’t have the momentum that we thought it did.”
    (Ed Ludlow, [05:10])

  • Reliance on undisclosed or in-progress energy demand forecasts adds uncertainty.

• Oracle’s Position Going Forward

  • Despite headlines, Oracle remains committed to a broader 4.5GW deal with OpenAI across multiple sites; Texas is just one piece.
  • Weather-induced outages at the Abilene site and tension with Crusoe also factored into the expansion's cancellation, but both parties continue to affirm their relationship.
  • Oracle’s leverage and credit profile will stay under investor scrutiny.

Notable Quotes

• “Building these data centers is very difficult, let alone capital intensive.” (Ed Ludlow, [05:10])
• “There is still a commitment for Oracle and OpenAI to do 4.5 gigawatts across multiple sites.” (Ed Ludlow, [06:11])

Global Energy Crisis: Middle East Conflict & Oil Market Shocks

Segment Starts: [11:12]

Key Discussion Points

• Market Disruption

  • Conflict has nearly halted traffic through the Strait of Hormuz, causing tankers to idle, storage tanks to fill, and production cuts in the Middle East.
  • Dr. Ellen Wald: “If we don’t get traffic moving through the Strait of Hormuz soon...we’re looking at shortages across Asia and all sorts of other dislocations...” (Wald, [12:07])
  • Natural gas supplies to Europe are also threatened due to shutdowns in Qatar.

• What Can Be Done?

  • Immediate intervention needed: reinsurance for ships, concerted military action to protect tankers, alternative southern shipping routes, and potentially removing Iranian military presence on strategic islands.
  • “That’s like the tip of the iceberg...We need some concerted military effort to protect ships.” (Wald, [13:47])

• Historical Parallels and US Position

  • While the US is more insulated than other nations, Dr. Wald draws a historical example from the Suez crisis of the ’50s, arguing that better international proactive coordination is needed now.

• Saudi Arabia’s Role

  • Despite higher prices, Saudi oil (via Aramco) is bottlenecked if it can’t be physically shipped—only 7M barrels/day escape via the Red Sea.
  • Real global “winners” right now: Russia and (potentially) US producers—if the US ramps up drilling in response.

• China’s Vulnerability

  • China’s government has suspended exports of refined products to safeguard domestic supply, leaving other Asian buyers in the lurch.

• Price Projections and Urgency

  • If the strait isn’t cleared “by the end of next week,” Wald predicts triple-digit oil prices:

    “I definitely think 120 is possible. I mean, we're already at 90, 92. So if nothing, nothing moves, then we could definitely see 100, I would say by early next week.”
    (Dr. Ellen Wald, [22:12])

Notable Quotes

• “We need some concerted military effort to protect ships...there’s just this issue of these drones flying everywhere...” (Wald, [13:47])
• “It’s only a good thing for Aramco...if they can actually sell oil.” (Wald, [18:20])

Stress in Private Credit Markets

Segment Starts: [23:12]

Key Discussion Points

• Redemptions & Contagion Fears

  • BlackRock's private credit fund curbs withdrawals; retail investors and “tourists” in private credit are taking fright.
  • “Private credit is experiencing its roach motel moment in terms of retail getting spooked.” (James Crombie, [24:08])

• Understanding Private Credit

  • These are illiquid, long-term direct loans: “It’s not liquid. These are long-term investments in direct loans which...you sign a contract, you agree to lend the company money for let's say five years and you get it back after five years plus a premium...” (Crombie, [24:54])
  • Investors are learning some loans made in “easy money” years are now coming due in a much harsher environment—some borrowers may be replaced by AI, for example.

• Risks and Returns

  • “Curb your enthusiasm about private credit returns. They're not going to be 20%. They may be closer to, you know, less than 10.” (Crombie, [27:36])

• Market Transparency & Systemic Risk

  • The visible side of private credit: BDCs (Business Development Companies) offer some transparency, but the market as a whole remains opaque.
  • “To me it’s an orderly sell off. It’s a repricing of a market that got very, very expensive.” (Crombie, [29:24])
  • However, further rate increases could worsen stress for weaker borrowers.

Notable Quotes

• “Read the paperwork...The problem with credit...is people just haven’t been doing that work.” (Crombie, [24:38])
• “If rates go up, it will certainly stress out the weak borrowers with a lot of debt coming due.” (Crombie, [29:57])

Portfolio Strategy Amid Volatility: Insights from Sevesti Balafaz

Segment Starts: [33:05]

Key Discussion Points

• Stance on Current Macro Environment

  • Despite volatility, no dramatic portfolio changes yet: “If we've set up ourselves in the right way...with diversified portfolios...not making dramatic changes right now.” (Balafaz, [33:44])
  • Holding cash, waiting for further clarity on oil prices and war duration.

• Diversification in Practice

  • Tilt towards dividend stocks and defense stocks at the start of the year has paid off; dividend strategies are up “close to double digit numbers” despite S&P/tech declines.

• Tech/SaaS Decline – Cautious but Selective

  • Caution about the “SaaS apocalypse” narrative: “Not ready to say stay away from software. Software sucks. No, not as a whole. Absolutely not...it's going to be case by case dependent.” (Balafaz, [37:00])

• International Exposure & Strong Dollar

  • International equities remain attractive on fundamentals, but currency risk from a strong US dollar currently tempers allocations.

• Defense Sector as a Long-Term Play

  • With production ramping up after meetings with top defense manufacturers, defense stocks are in a “super cycle”:

    “Yes, that is something that we're tilting towards because I do think we're in a super cycle. All of this ammunition has been used up. We need to stockpile again. So I think this is here for the long term and it's not only a US thing, but a global thing.”
    (Balafaz, [39:17])

Notable and Memorable Quotes

• “Data centers are difficult to build...there is going to be a deeper look at the specifics here.” (Ed Ludlow, [02:41])
• “We need some concerted military effort to protect ships.” (Dr. Ellen Wald, [13:47])
• “Private credit is experiencing its roach motel moment in terms of retail getting spooked.” (James Crombie, [24:08])
• “Curb your enthusiasm about private credit returns. They're not going to be 20%. They may be closer to...less than 10.” (James Crombie, [27:36])
• “Dividend strategies close to double digit numbers where, you know, S and P overall is down and large cap tech is down.” (Sevesti Balafaz, [35:02])
• “We’re in a super cycle...need to stockpile again...here for the long term.” (Sevesti Balafaz, [39:17])

Timestamps for Major Segments

• Oracle & OpenAI Data Center Expansion: [02:02] – [09:07]
• Energy Market Crisis ft. Dr. Ellen Wald: [11:12] – [22:22]
• Private Credit Turmoil ft. James Crombie: [23:12] – [30:37]
• Portfolio Strategy ft. Sevesti Balafaz: [33:05] – [39:26]

For full business news, strategic analysis, and live market updates, listen weekdays 2–5pm ET or visit Bloomberg's platforms for replays.