Oracle Invokes Force Majeure as $18bn Project Jupiter AI Data Center Faces Mounting Pressure
14 Sources
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Oracle's $18bn data centre debt under strain amid local pushback
About $18bn of loans tied to a data centre leased to Oracle in New Mexico slid into stressed territory on Friday, highlighting investors' fear that increasing local backlash will derail the tech group's massive AI infrastructure build-out. Loans linked to "Project Jupiter" were privately quoted at
[2]
AI Bubble Watch: Oracle Seeks Financial Shield From Massive Data Center Project
The future of the American artificial intelligence industry is tied to the massive data center initiative known as Project Stargate. Oracle, one of the biggest backers of that effort, just took steps to shield itself from financial liabilities from one leg of the project that has hit repeated
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Oracle cites force majeure on Project Jupiter data centre
The notice would let Oracle delay payments if its Stargate campus for OpenAI misses its 2028 start date. Oracle has sent a force majeure notice over Project Jupiter, a huge AI data centre being built in New Mexico, Bloomberg reported on Thursday, citing people familiar with the matter. The notice
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The AI borrowing binge is back in the spotlight
Why it matters: Oracle is the weakest of the hyperscalers, with the lowest credit rating and a stock that's down 30% for the year -- but with AI investment driving much of the economic growth in the U.S., its wobbles mean a lot. Where it stands: Oracle sent the developer of a data center project
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Oracle invokes force majeure on New Mexico AI data center
Blue Owl Capital disputed any suggestion that the notice would alter the project's finances. "This notice does not change the financial commitments to this multi-year project," the company said in a statement. The data center, called Project Jupiter, is part of the broader Stargate AI
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Oracle cites 'force majeure' to shield itself on controversial data center
Oracle Corp. is moving to shield itself from racking up expenses on a massive data center being built in New Mexico, adding a fresh wrinkle to a project beset by opposition and regulatory setbacks. The technology giant sent the project's developer, a unit of Blue Owl Capital Inc., a notice citing
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Analysis-Oracle, Blue Owl Project Delay Sends Ripples Through AI Financing, Sources Say
NEW YORK, Sept 24 (Reuters) - Oracle's move to protect itself against potential delays at a massive data center project developed by Blue Owl in New Mexico sent a chill through the trillion-dollar market for AI infrastructure financing, according to interviews with bankers and investors. Oracle
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AI infrastructure financing: Oracle, Blue Owl project delay sends ripples through AI financing
Oracle's move to protect itself against potential delays at a massive data center project developed by Blue Owl in New Mexico sent a chill through the trillion-dollar market for AI infrastructure financing, according to interviews with bankers and investors. Oracle issued a force majeure notice in
[9]
Oracle-Blue Owl Project Delay Puts AI Data Center Financing Under Spotlight
A delay at a major data center project being developed by Blue Owl in New Mexico is putting fresh focus on the risks behind the massive financing push for artificial intelligence infrastructure. Oracle issued a force majeure notice linked to the Jupiter campus, which is being built by Blue Owl's
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SoftBank shares fall as Oracle data-center warning fuels AI funding fears By Investing.com
Investing.com -- SoftBank Group shares fell on Friday after Oracle's move to protect itself against potential delays at a major New Mexico data-center project raised fresh concerns over the financing and execution of the AI infrastructure buildout. The stock slid 3.1% to 6,154.0 yen after
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Oracle triggers force majeure on massive 'Project Jupiter' data center By Investing.com
Investing.com -- According to a recent report from Bloomberg, Oracle Corp. is moving to shield itself from mounting financial liabilities tied to its massive artificial intelligence data center in New Mexico. Facing fierce local opposition and regulatory setbacks, the tech giant has issued a force
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Oracle Rekindles Doubts About Funding for AI Infrastructure
Oracle's force majeure notice on a massive data center in New Mexico is unnerving the markets. It comes at a time when investors are growing increasingly demanding about the risks in a sector that is extremely capital intensive. Oracle has invoked force majeure for Jupiter, a site being built by
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Oracle, Blue Owl project delay sends ripples through AI financing, sources say
NEW YORK, Sept 24 (Reuters) - Oracle's move to protect itself against potential delays at a massive data center project developed by Blue Owl in New Mexico sent a chill through the trillion-dollar market for AI infrastructure financing, according to interviews with bankers and investors. Oracle
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Oracle's $18 billion data center debt under pressure, FT reports
Sept 18 (Reuters) - About $18 billion in loans tied to an Oracle-leased data center in New Mexico has come under pressure, with loans quoted at 89 to 91 cents on the dollar by syndicate banks including Santander and Jefferies, the Financial Times reported on Friday. The development comes amid
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Oracle sent a force majeure notice to Blue Owl Capital over Project Jupiter, its massive AI data center in New Mexico tied to $18bn in stressed debt. The move signals Oracle wants payment delays if the 2028 deadline slips amid fierce local opposition, regulatory hurdles, and pipeline blockages that have already pushed the project seven months behind schedule.
Oracle has invoked force majeure on Project Jupiter, its massive AI data center in New Mexico, as $18bn of loans tied to the project slid into stressed territory amid mounting local and regulatory pushback
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. The notice, sent to developer Blue Owl Capital, signals Oracle wants the right to delay payments if the campus fails to open by its 2028 target date3
. While Oracle insists the project remains on schedule, the move reveals growing anxiety around one of the most ambitious AI infrastructure developments in the Stargate programme.Financial Risks Mount as Debt Trades at Distressed Levels
Loans linked to Project Jupiter were privately quoted at 89 to 91 cents on the dollar by syndicate banks including Santander and Jefferies, well below the tight band near par that characterizes healthy debt
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. Oracle bonds set to mature in 2055 are now trading at 77 cents on the dollar, according to PitchBook data4
. The cost of buying credit default swaps on Oracle's data centre debt also rose following news of the force majeure notice, reflecting rising investor worries4
. Banks were forced to hold more Oracle-linked project debt on their balance sheets than initially planned as efforts to offload the debt to broader investors hit a wall due to concerns around Oracle's massive borrowing and declining creditworthiness1
. Oracle's corporate credit rating currently sits one notch above junk following a downgrade from S&P in July, making it the weakest of the hyperscalers1
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.Environmental Concerns and Pipeline Supply Issues Derail Timeline
Source: Market Screener
The 1,400-acre AI data center campus in Doña Ana County faces fierce local opposition over concerns about its impact on water supply and air quality
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. The New Mexico State Land Office blocked requests to run a natural gas pipeline to the data center twice—first in March and again in July—citing emissions and strain on water and other local resources3
. Oracle announced in April it would power the facility with Bloom fuel cells, which emit less sulphur and nitrogen oxides, but permission to connect a pipeline to feed these was also blocked1
. Energy Transfer, which would build the 17.8-mile pipeline, has since rerouted it across federal land and pushed back the pipeline's start date from August 15 to February 13
. The project's air permit application was paused in August after lawsuits from two environmental groups, though a judge ruled the process could continue1
. Project Jupiter's initial phase is at least seven months behind its proposed date to come online, according to market intelligence firm SynMax1
.Local and Regulatory Pushback Threatens Stargate AI Infrastructure
Source: Axios
A recent poll by the Albuquerque Journal found that 65 per cent of New Mexico residents oppose the development of large data centres, versus only 20 per cent supporting such construction
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. Deb Haaland, New Mexico's Democratic gubernatorial nominee and former US Interior secretary, said she would pause all new data centres if elected in November and require developers to heavily invest in renewable energy1
. State filings show Oracle donated more than $12,000 to her campaign in late August1
. "Big Tech's mantra may be 'move fast and break things', but here in New Mexico, we do things our way," Haaland said in a press conference1
. The regulatory hurdles come as New Mexicans have been fighting the project since at least 2025, adding political risk to an already complex AI infrastructure development4
.Related Stories
OpenAI Partnership and Stargate Programme at Stake
Source: Market Screener
Project Jupiter sits at the heart of Oracle's landmark $300bn contract with OpenAI to provide computing power
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. The project, which could cost up to $165bn and would run on as much as 2.45GW of Bloom Energy fuel cells, is part of the broader Stargate programme spearheaded by OpenAI and SoftBank3
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. The marquee project secured $18bn of loans from a consortium of about 20 banks late last year to kick-start construction, along with billions in equity investment from Blue Owl1
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. Any delay at Jupiter would push back computing plans critical to OpenAI's operations, as Stargate's backers are raising record sums of debt to fund the AI borrowing binge3
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. Oracle's stock has plunged 50 per cent since it unveiled its $300bn deal with OpenAI a year ago, and last week, Oracle's 82-year-old co-founder Larry Ellison abruptly cancelled a $7.5bn share-trading plan without explanation1
.What the Force Majeure Notice Actually Means
The force majeure notice doesn't mean Oracle's obligations to pay the lease are canceled—it's essentially an FYI to the developer that reserves Oracle's right to delay payments if extraordinary events prevent the 2028 deadline from being met
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. Oracle hasn't asked to get out of its lease entirely, and there's no guarantee it can free itself from its financial commitments2
. Blue Owl Capital disputed any suggestion that the notice would alter the project's finances, stating "This notice does not change the financial commitments to this multi-year project"5
. However, RBC Capital Markets noted the notice "signals the company's own risk assessment has shifted enough to warrant legal cover"4
. Watch for whether Oracle secures payment delays and how bond markets react to further project setbacks, as the situation highlights the interconnected financial risks in AI infrastructure development where hyperscalers have committed billions in future payments for data centers that haven't been built yet.References
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