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Oracle sends ‘force majeure' notice about data center project — stock drops 3%

Oracle sends ‘force majeure' notice about data center project — stock drops 3%

Tech infrastructureenterprisecloud CNBC
Oracle triggered a force majeure clause for its New Mexico data center, citing project delays and regulatory hurdles.
What: Oracle notified its developer, a unit of Blue Owl Capital, that it may delay payments if the 2.4-gigawatt 'Project Jupiter' campus misses its 2028 completion date. Oracle stock fell 3%, and Bloom Energy, slated to provide fuel cell power, also dropped 3%.
Why it matters: This signals that even massive AI infrastructure projects are facing significant execution risk from local opposition, regulatory bottlenecks, and energy pipeline delays, challenging the aggressive timelines set by major cloud providers.
Decoder
  • Force majeure: A contract provision that frees parties from liability when an extraordinary event beyond their control prevents them from fulfilling obligations.
Original article

Key Points

  • Oracle sent a "force majeure" notice to the developer of its data center project in New Mexico.
  • The company is looking to delay payment if the project doesn't come online in 2028, according to Bloomberg.
  • The data center, dubbed Project Jupiter, has faced regulatory hurdles and local opposition.

Oracle shares fell more than 3% on Thursday following news that the company sent a "force majeure" notice tied to its New Mexico data center project to protect itself from higher expenses.

"Project Jupiter remains on our planned schedule," Oracle said in a statement to CNBC. "We are fully committed to New Mexico and confident in our path forward."

Bloomberg was first to report the news, citing sources familiar with the matter.

The company is looking to delay payment on the campus, dubbed Project Jupiter, if it fails to come online as expected in 2028, according to the report.

Oracle sent the notice to the developer, which is a unit of Blue Owl Capital, CNBC confirmed. Blue Owl also saw its shares fall on Thursday.

"This notice does not change the financial commitments to this multi-year project," Blue Owl Capital said in a statement to CNBC.

The New Mexico data center project, which is part of the broader Stargate artificial intelligence infrastructure build-out with President Donald Trump, has been riddled with setbacks and regulatory hurdles.

That includes local opposition to data centers ahead of the upcoming midterm elections and concerns from environmental groups. The site has also faced delays with the buildout of a natural gas pipeline intended to fuel the facility.

Shares of Bloom Energy, which is slated to power the more than 2.4-gigawatt facility with its fuel cells, fell 3% on the news. In a post to X, the company said it remains "committed" to the contract and following the "planned timeline."

Oracle co-CEO Clay Magouyrk told analysts on the company's earnings call on Sept. 10 that Project Jupiter would not affect its previously stated fiscal 2027 revenue or earnings guidance.

Concerns have also mounted over Oracle's $18 billion in debt tied to the data center, which is already trading at stressed levels, according to the Financial Times.

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