Oracle Invokes Force Majeure On Massive New Mexico AI Data Center Project

Oracle has sent a force majeure notice to the developer of a major data center project in New Mexico, seeking to delay payments if construction setbacks prevent the facility from coming online as planned in 2028.

The technology company notified a unit of Blue Owl Capital, the project’s developer, in a move aimed at protecting itself from accumulating costs on the campus known as Project Jupiter. The facility is designed to handle 2.45 gigawatts of power and forms a key part of the Stargate AI infrastructure initiative announced by President Donald Trump alongside Oracle, OpenAI and SoftBank.

Payment delay, not exit

Oracle is not attempting to exit the project as the main tenant. Instead, the notice seeks to defer rent payments should delays materialise,materialise, people familiar with the matter told Bloomberg. If both sides agree a force majeure event linked to power commitments has occurred, Oracle could secure a three-year delay on rent once payments are due. The company would still cover other interim costs and remain obligated for the full lease term later.

An Oracle spokesperson said force-majeure notices are common in large-scale developments and do not by themselves establish delays or alter delivery expectations. A Blue Owl spokesman added that the notice does not change financial commitments and that both parties remain 'fully aligned' on the project.

Regulatory and energy setbacks

Project Jupiter has faced repeated obstacles. A key natural gas pipeline meant to supply the site, developed by Energy Transfer LP, was delayed by nearly six months to February 2027 after New Mexico State Land Office permit denials. The campus is intended to run on gas-powered fuel cells from Bloom Energy Corp.

The project has also become a flashpoint amid growing local and political opposition to AI data center expansion ahead of US midterm elections.

Market reaction and financing risks

Oracle shares fell 4.4 percent in early trading, extending a year-to-date decline of 29 percent. Blue Owl shares dropped 3.7 percent, while a measure of Oracle’s credit risk hit a record high. Debt tied to the development was trading below 90 cents on the dollar, reflecting investor concern.

About 20 banks provided an $18 billion construction loan. The force majeure notice does not trigger a default on that financing, according to people briefed on the matter.