Oracle shares ORCL fell about 5% on Thursday after the company sent a force majeure notice related to Project Jupiter, a large artificial intelligence data center campus being built in New Mexico, reported Bloomberg.
The notice was sent to the project’s developer, a unit of Blue Owl Capital. Oracle is not seeking to exit its role as the project’s main tenant, but wants the ability to delay payments if construction setbacks prevent the facility from coming online as planned in 2028.
A force majeure provision can protect companies from contractual obligations when events outside their control prevent a project from proceeding as planned.
Project Jupiter faces regulatory hurdles
Project Jupiter has faced several setbacks, including regulatory challenges surrounding its energy supply.
The New Mexico State Land Office blocked a request for a natural gas pipeline intended to supply power to the facility.
The pipeline project developed by Energy Transfer has subsequently been delayed by nearly six months to Feb. 1, 2027, following repeated permit denials.
Project Jupiter is designed to use gas-powered fuel cells from Bloom Energy and is expected to have 2.45 gigawatts of capacity.
The facility is a major part of the Stargate AI infrastructure buildout involving Oracle, OpenAI and SoftBank.
Oracle said the project remains on schedule despite the latest developments.
“Project Jupiter remains on our planned schedule,” an Oracle spokesperson said in a statement to Bloomberg. “We are fully committed to New Mexico and confident in our path forward.”
Blue Owl also said the force majeure notice does not alter the project’s financial commitments.
“This notice does not change the financial commitments to this multiyear project,” a Blue Owl spokesperson said in the Bloomberg report, adding that the parties remain fully aligned on Project Jupiter.
$18B debt tied to the data center
The latest development comes as investors are already monitoring the financing behind Project Jupiter.
Around 20 banks provided an $18 billion loan to fund construction of the data center campus.
Bloomberg reported that the debt tied to the project was trading below 90 cents on the dollar, indicating that the loans were under pressure.
The financing is part of a broader wave of debt deals used to fund the expansion of AI infrastructure.
A potential delay could therefore have implications beyond Oracle’s payments.
The project relies on Oracle as its main tenant, making the company’s commitment important to the development and its financing.
The facility is also part of Oracle’s wider AI infrastructure expansion with OpenAI.
OpenAI signed a $400 billion deal with Oracle and SoftBank last year to support the development of five US data centers, including the New Mexico site.
Oracle faces wider AI infrastructure questions
Project Jupiter has become a focus of broader concerns surrounding the rapid expansion of AI data centers.
The development has faced local opposition, environmental concerns and regulatory hurdles, while its substantial power requirements have added to the scrutiny.
Oracle Co-CEO Clay Magouyrk said on the company’s Sept. 10 earnings call that Project Jupiter would not affect its previously stated fiscal 2027 revenue or earnings guidance.
The force majeure provisions are also drawing attention as data center developers and customers manage construction, power and financing risks.
Such clauses are becoming increasingly relevant to large AI infrastructure projects, according to a June client alert from law firm Quinn Emanuel Urquhart & Sullivan.
Despite the stock decline, William Blair kept its buy rating on the stock on September 24 according to TipRanks data.
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