Oracle shares rose 4% on Tuesday as investors weighed a proposed electricity agreement tied to the company's Project Jupiter artificial intelligence data center in New Mexico, alongside a new data center security collaboration with Microsoft and Marvell Technology.
The proposed energy service agreement with El Paso Electric would supply power during the final construction phase and initial commissioning tests at Project Jupiter. It would also cover emergency backup electricity and life-safety requirements for workers at the site. Oracle said its existing plan to use Bloom Energy's fuel cell microgrid as the facility's primary power source remains unchanged.
Oracle proposes $10 million annual payment
Under the proposed arrangement, Oracle expects to pay El Paso Electric $10 million annually for 10 years, regardless of whether it uses all the electricity available under the contract. The company said those payments would cover costs tied to the shared electricity system that would otherwise be borne by El Paso Electric's New Mexico customers.
Separately, Oracle proposed providing electricity bill credits of up to $55 million annually for as many as three years to residential customers and small businesses served by El Paso Electric in New Mexico. Those credits could begin reaching customers in 2027. Oracle said the proposal exceeds the White House Ratepayer Protection Pledge, which it signed to cover its own energy costs.
The customer credits and annual payments form separate parts of the proposed arrangements, with the latter intended to help offset shared electricity infrastructure costs.
Bloom Energy remains primary power supplier
Oracle reaffirmed that Bloom Energy's fuel cell microgrid would remain the main electricity source for Project Jupiter. The announcement follows Oracle's April decision to use Bloom Energy fuel cells to power the AI data center campus in Doña Ana County, New Mexico.
Under that plan, the site would be supported by up to 2.45 gigawatts of installed Bloom fuel cell capacity. The approach replaced an earlier design that relied on gas turbines and diesel generators. The proposed agreement with El Paso Electric does not change this primary power arrangement. Instead, it addresses electricity needs during construction, commissioning and emergency situations.
Reliable power supply has become an important consideration for large AI data centers, which require substantial infrastructure to support computing workloads. Oracle's proposed arrangements also address how the costs of shared electricity infrastructure would be allocated between the company and local customers.
Oracle, Microsoft and Marvell form security working group
Oracle also announced a collaboration with Microsoft and Marvell Technology to develop common hardware security standards for cloud and hyperscale data centers. The companies have established a working group within the Open Compute Project's Security Track.
Its objective is to develop an integrated hardware security module design that meets the NIST FIPS 140-3 Level 3 standard. The group plans to develop open specifications for managing encryption keys directly within servers. The proposed approach would integrate certified hardware protection, key storage, and mechanisms to verify workload integrity into server infrastructure.
The companies said existing approaches often rely on transferring encryption keys across networks from separate security modules or managing them through software alone. Embedding security capabilities within servers could reduce delays and strengthen protection for cloud computing workloads.
The working group expects to release an initial draft around the Open Compute Project Global Summit, held from October 12 to 15 in San Jose, California. Version 1.0 is expected to follow.
The power agreement and security initiative highlight two areas of Oracle's infrastructure expansion: securing reliable electricity for AI computing and developing hardware standards to protect the workloads running on its cloud systems.
This article is for informational purposes only and does not constitute financial advice.
