Oracle shares fell roughly 5% on Thursday after the company issued a force majeure notice concerning Project Jupiter, a sprawling artificial intelligence data center campus under construction in New Mexico, according to Bloomberg. The notice was delivered to the project's developer, a unit of Blue Owl Capital.
Oracle is not attempting to walk away from its position as the anchor tenant. Instead, the notice seeks to preserve the company's ability to defer payments if construction setbacks push the facility's operational start date beyond the planned 2028 timeline. Force majeure clauses are standard contractual tools that shield parties from obligations when events beyond their control disrupt a project.
Regulatory and energy hurdles
Project Jupiter has encountered multiple obstacles, particularly around its power supply. The New Mexico State Land Office rejected a request for a natural gas pipeline that would have fed the facility. That pipeline, developed by Energy Transfer, has now been pushed back by roughly six months to Feb. 1, 2027, after repeated permit denials.
The campus is designed to rely on gas-powered fuel cells from Bloom Energy and is expected to deliver 2.45 gigawatts of capacity. It forms a central piece of the Stargate AI infrastructure initiative involving Oracle, OpenAI and SoftBank.
Oracle maintains that the project remains on schedule. "Project Jupiter remains on our planned schedule," a company spokesperson told Bloomberg. "We are fully committed to New Mexico and confident in our path forward." Blue Owl echoed that sentiment, stating the force majeure notice does not alter the project's financial commitments and that all parties remain aligned.
$18 billion in debt under scrutiny
Investor attention was already focused on the financing structure behind Project Jupiter. Approximately 20 banks extended an $18 billion loan to fund construction of the campus. Bloomberg reported that the debt tied to the project was trading below 90 cents on the dollar, a sign of strain in the credit markets.
This financing is part of a broader surge in debt deals used to bankroll AI infrastructure expansion. A potential delay could therefore ripple beyond Oracle's payment obligations, given that the project depends on Oracle as its primary tenant. The facility also sits within Oracle's wider AI buildout alongside OpenAI, which signed a $400 billion agreement with Oracle and SoftBank last year to support five US data centers, including the New Mexico site.
Wider AI infrastructure concerns
Project Jupiter has become a lightning rod for broader worries about the pace of AI data center construction. The development has drawn local opposition, environmental scrutiny and regulatory challenges, while its enormous power requirements have intensified the debate.
On the company's Sept. 10 earnings call, Oracle Co-CEO Clay Magouyrk said Project Jupiter would not affect previously stated fiscal 2027 revenue or earnings guidance. Force majeure provisions are gaining prominence as developers and customers navigate construction, power and financing risks, according to a June client alert from law firm Quinn Emanuel Urquhart & Sullivan.
Despite the stock decline, William Blair maintained its buy rating on Oracle as of September 24, according to TipRanks data.
This article is for informational purposes only and does not constitute financial advice.
