Oracle has sent a force majeure notice to developer Blue Owl Capital regarding Project Jupiter, a planned AI data center in New Mexico, seeking to delay payments if the facility does not become operational by its target date of 2028. The notice was reported by Bloomberg News on September 24, citing sources familiar with the matter. Oracle’s shares fell approximately 4% in premarket trading following the report.
Oracle stated in a response that Project Jupiter remains on schedule and reaffirmed its commitment to the project. A spokesperson for the company said, “Project Jupiter remains on our planned schedule. We are fully committed to New Mexico and confident in our path forward.”
Blue Owl Capital, the developer of the project, confirmed receipt of the notice in a statement. “Blue Owl, STACK Infrastructure and Oracle remain fully aligned on Project Jupiter,” the spokesperson said. “This notice does not change the financial commitments to this multiyear project.”
Project Jupiter: Background and Stakes
Project Jupiter is part of Oracle’s broader Stargate AI infrastructure initiative, announced in partnership with OpenAI, SoftBank Group, and the Trump administration in early 2024. The facility was positioned as a cornerstone of a historic AI infrastructure push, with plans to support advanced computing needs for AI development.
The project has faced regulatory hurdles and local opposition, including concerns from environmental groups and community members regarding energy consumption and infrastructure strain. The data center was engineered to require a massive energy scale, raising questions about its feasibility in the region.
Financial and Market Impact
Oracle has borrowed tens of billions of dollars to finance its AI data center expansion, including Project Jupiter. The company reported $28.5 billion in capital expenditures in its first quarter, up from $8.5 billion a year earlier, and maintained a fiscal 2027 capital expenditure forecast of $90 billion to $95 billion.
Analysts noted that the force majeure notice signals Oracle’s increased risk assessment regarding potential delays. RBC Capital Markets analyst Rishi Jaluria wrote in a note to investors that the notice “signals the company's own risk assessment on execution has shifted enough to warrant legal cover.”
The project’s $18 billion in debt has also drawn scrutiny, with reports indicating that the debt is already trading at stressed levels. Some institutional investors and banks have expressed caution about taking on additional exposure to Oracle’s Stargate data centers.
Legal and Contractual Context
A force majeure clause typically allows parties to suspend or excuse contractual obligations when events beyond their control prevent performance. Oracle’s notice seeks to delay payments rather than withdraw entirely as the anchor tenant, according to sources cited by Bloomberg.
The legal enforceability of Oracle’s move remains uncertain. While the company asserts its contractual standing, it is unclear whether the maneuver will legally relieve Oracle of its earlier financial obligations. Blue Owl’s statement emphasized that the notice does not alter the project’s financial commitments.
Regional and Political Considerations
The project has become entangled in local and national politics, with concerns raised ahead of upcoming midterm elections. Environmental groups have also opposed the data center due to its energy demands and potential environmental impact.
The Trump administration originally framed the Stargate initiative as a historic investment in AI infrastructure, positioning it as a key component of the administration’s economic and technological agenda. However, the project’s progress has been slowed by regulatory and community challenges.