OFSS Shares Tumble 5% After Oracle Issues Force Majeure Notice for New Mexico AI Data Centre

Oracle Issues Force Majeure Notice for Project Jupiter

OFSS shares plunged more than 5% on Friday, September 25, hitting a nine-week low of Rs 10,332 on the NSE after parent company Oracle issued a force majeure notice for Project Jupiter, a massive AI data centre campus in New Mexico1

1

. The notice addresses possible power delays at AI data centre, marking a significant setback for the 1,400-acre facility being developed by Blue Owl unit STACK Infrastructure to support ChatGPT-maker OpenAI2

2

. Oracle cited potential delays in securing power for the New Mexico data centre project, which it plans to use to supply AI computing capacity to OpenAI2

2

.

AI Infrastructure Financing Faces Growing Scrutiny

The development has sent shockwaves through AI infrastructure financing markets, with Oracle shares dropping around 3.5% on Wall Street and Blue Owl falling approximately 4%1

1

. Companies typically invoke force majeure to free themselves from contractual obligations when problems arise beyond their control. Oracle aims to delay payments should the data centre fail to come online in 2028 as planned, rather than exiting as the main tenant1

1

. According to Sean McDevitt, a partner at management consulting firm Arthur D. Little, "The financing side of the AI buildout is starting to ask much harder questions than the demand side. The underlying demand still appears very strong, but investors and lenders are increasingly focused on how risk is allocated"1

1

.

Project Jupiter Faces Multiple Challenges

Project Jupiter has encountered several regulatory hurdles and environmental concerns that threaten its planned 2028 opening. The campus in Doña Ana County faces local opposition over fears it would impact water supply and air quality1

1

. The project has also faced setbacks involving a planned natural gas pipeline and challenges related to water and air-quality permits2

2

. Under the contract, Oracle is responsible for arranging power for the site, making power delays a critical bottleneck for scaling AI infrastructure2

2

. The campus forms part of Stargate AI infrastructure initiative, involving OpenAI, Oracle, SoftBank and other partners2

2

.

Financial Impact and Market Pressures

Blue Owl has approximately $3 billion of equity invested in the project and earns a lower return during construction, with returns increasing once the AI data centre is completed1

1

. Earlier this month, around $18 billion in loans tied to the Oracle-leased data centre in New Mexico came under pressure, with loans quoted at 89 to 91 cents on the dollar by syndicate banks including Santander and Jefferies1

1

. Last week, banks quoted about $18 billion in loans tied to the campus at 89 to 91 cents on the dollar, with concerns about Oracle's borrowing and setbacks at the site making the debt harder to sell to investors2

2

. This investor caution reflects growing financing pressures across the AI infrastructure sector.

OFSS Shares Head for Worst Week Since January 2025

OFSS shares have fallen more than 12% in one week, underperforming the Nifty IT index which has fallen nearly 3% during the same period1

1

. The stock was down about 11% for the week, putting it on course for its steepest weekly fall since January 2025, when it declined more than 12%2

2

. OFSS shares touched Rs 10,332 on the NSE before recovering to Rs 10,572, down 3.2% during Friday's session2

2

. Despite recent losses, OFSS shares have delivered 36% returns overall in 2025 so far, even as other IT peers fell and pushed the Nifty IT index down more than 26%1

1

.

What Investors Should Watch

Brokerage William Blair expects limited near-term effects on Oracle despite concerns about power and regulatory delays, noting that Jupiter will contribute no revenue in Oracle's fiscal 2027, leaving that year's revenue unaffected by the campus's delivery timetable2

2

. Both Oracle and Blue Owl maintain that they remain committed to the project, with Oracle stating that Jupiter "remains on our planned schedule" and Blue Owl saying the notice does not change the companies' financial commitments2

2

. The notice has brought fresh attention to the costs and schedules behind large AI data centres, though it does not indicate that OpenAI has reduced its demand for computing capacity2

2

. Monitor how quickly Oracle resolves power supply issues and whether the 2028 timeline holds, as delays could reshape AI infrastructure financing across the industry.