Yeah, they dropped out because they knew Cornell was going to get it and they preferred to quit rather than lose.

From multiple accounts, Stanford didn't have the same passion/funding/flexibility as Cornell in getting the deal done. Stanford is more prestigious, but that's not the only factor obviously - or why even have an open competiton at all?

The question is whether Stanford dropped out because they weren't interested or because they were about to lose to Cornell.

Yes, Stanford dropped out.

"Stanford University has withdrawn its application to the city of New York to construct an applied sciences and engineering campus on Roosevelt Island."

http://news.stanford.edu/news/2011/december/nyc-campus-12161...