Oracle Issues Force Majeure Notice for New Mexico AI Project

Oracle Corporation issued a force majeure notice to STACK Infrastructure and its owner, Blue Owl Capital, regarding Project Jupiter, a 2.45-gigawatt AI data center campus in Doña Ana County, New Mexico. The move aims to protect Oracle from liability and defer rent payments for up to three years if the facility fails to meet its 2028 operational target. The project is a component of the $500 billion Stargate initiative, a partnership involving OpenAI and SoftBank Group.

The project faces significant infrastructure and regulatory hurdles, including a six-month delay of a natural gas pipeline due to permit denials from the New Mexico State Land Office and previous legal battles over air and water permits. While some reports indicate the notice was triggered by power delays that pushed completion back by one year, Oracle Vice President Michael Egbert maintains that the project remains on schedule and that such notices are commonplace to preserve contractual rights.

Market reaction was negative, with shares of Oracle and Blue Owl both declining and Oracle's stock dropping approximately 4%. The news also impacted AI hardware firms like Nvidia and AMD, while construction debt for the project—backed by an $18 billion loan from roughly 20 banks—began trading at distressed levels. Blue Owl Capital stated that the notice does not alter the project's financial commitments and that the partners remain aligned.