Oracle Cites Force Majeure on Its $18 Billion New Mexico Data Center

Oracle sent a force-majeure notice to the developer of Project Jupiter, its 1,400-acre New Mexico data-center campus, seeking to delay payments if the site misses its 2028 target — and the stock fell nearly 7% intraday on the news.

Oracle reached for the force-majeure clause on Thursday — the contract language of events beyond anyone's control — to shield itself from the mounting costs of Project Jupiter, its 1,400-acre data-center campus in southern New Mexico. Bloomberg News, citing people familiar with the matter, reported that Oracle sent the notice to Stack Infrastructure, the developer owned by Blue Owl Capital. Oracle shares fell nearly 7% in morning trading before paring the decline.

The notice is not an exit. Rather than walking away as the campus's main tenant, Oracle is seeking to delay payments should Project Jupiter fail to come online in 2028 as planned, according to the report. A person familiar with the matter separately told Reuters the notice cites "potential delays in securing power for the project."

A lease Oracle cannot walk away from

Reuters' updated reporting sketched the contract economics behind the maneuver — and why the legal lever matters. Securing power for the site is Oracle's responsibility under the contract, and Oracle cannot terminate the lease under any circumstances, the person familiar said. Blue Owl has about $3 billion of equity in the project; Oracle is on the hook for the debt costs.

The rent mechanics explain the timing. During development, Blue Owl earns a 9% yield on its equity, expected to rise to about 11% levered once the campus is complete. By invoking force majeure, Oracle extends the stretch in which it pays the lower development-stage rent — Blue Owl still collects the higher rent for the originally planned duration, but its start gets pushed back.

"Remains on our planned schedule"

Oracle declined to comment on the notice itself, but pushed back on any suggestion of a delay. "Project Jupiter remains on our planned schedule," the company told Reuters, adding that "force-majeure notices are commonplace in developments of this scale and are often used to preserve contractual rights among project partners. They do not, by themselves, establish a project delay or change delivery expectations." To Bloomberg, a spokesperson said Oracle is "fully committed to New Mexico and confident in our path forward."

Blue Owl was similarly dismissive of any rupture, telling Reuters the notice "does not change the financial commitments to this multi-year project."

The pipeline that goes nowhere

The power problem is concrete, and it starts with a pipeline. The campus is designed to run on Bloom Energy fuel cells — up to 2.45 gigawatts, Oracle announced in April, pivoting away from gas turbines and diesel generators — which means it needs natural gas delivered to the site. But New Mexico Land Commissioner Stephanie Garcia Richard twice rejected Energy Transfer's bid to run a 0.6-mile portion of a 17-mile pipeline through state trust lands, first on March 20 and again in a July 14 letter denying reconsideration, citing emissions, strain on water and resources, and minimal benefit to the state trust.

Media reports say the pipeline's in-service date has slipped nearly six months, to February 2027.

The air-quality permit for the fuel-cell system is the other choke point. The state Environment Department must rule on or before Nov. 23 — a deadline already extended once, from July 1. Environmental group New Energy Economy tried to freeze the proceedings in the state Supreme Court, which on Sept. 17 let them resume; the group's petition says the permit would authorize roughly 8.8 million tons of carbon dioxide a year from the fuel cells.

The market's verdict

Oracle closed Thursday down 4.4% at $138.28, per TechDefused's after-close print, after the morning plunge to $134.66. (Reuters' earlier update had the decline at 3.3%.) The stock is now down 31% year to date, per Dow Jones.

The weakness spread to the project's partners: Blue Owl fell about 4% and Bloom Energy about 5%, per Investor's Business Daily.

William Blair said the news "intensifies worries about regulatory and power-related delays affecting AI deployments," while expecting minimal short-term impact on Oracle: "Practically, fiscal 2027 should not be affected, since Jupiter contributes no revenue this year." Oracle co-CEO Clay Magouyrk told analysts on the Sept. 10 earnings call that the campus would not hurt previously stated fiscal 2027 revenue or earnings guidance, per CNBC.

Why a $500 billion plan is watching one campus

Project Jupiter sits inside Stargate, the $500 billion U.S. AI-infrastructure commitment involving OpenAI, SoftBank and partners including Oracle, and underpins Oracle's agreement with OpenAI to supply AI computing capacity. Roughly $18 billion in construction loans from about 20 banks financed the campus — debt the Financial Times reported was quoted at 89 to 91 cents on the dollar earlier this month as the arranging banks struggled to place it.

Doña Ana County approved the campus in September 2025 through $165 billion in industrial revenue bonds over 30 years, directing half the project's gross-receipts tax revenue back to it, and construction is underway at the Santa Teresa site.

The dates that decide it

Nov. 23 is the hard date: the air-quality ruling. After that, the questions stack up — whether Energy Transfer can reroute the pipeline around state trust lands, whether Oracle's notice actually defers any payments, and whether the bank consortium can sell $18 billion of loans at anything near par. Oracle says it is "reimagining" the project's power plan. The permit calendar will grade it.

The notice's full text has not been made public, and no Oracle securities filing for it has surfaced; this account follows the Bloomberg reporting via the Reuters dispatch and Dow Jones Newswires, both read in full. How long the lower-rent development period gets extended — and what that is worth to each side — is the figure neither company has disclosed.