Key takeaways:
- Oracle issued a force majeure notice for its New Mexico AI data center.
- Pipeline permitting delays and local protests threaten its 2028 launch.
- Blue Owl says funding holds while Oracle claims the site stays on track.
Oracle has issued a force majeure notice for a New Mexico AI data center, seeking payment protection if construction delays prevent its planned 2028 launch.
The notice concerns Oracle Project Jupiter, a large data center campus developed by a unit of Blue Owl Capital, reflecting the broader boom in cloud computing infrastructure investment across the tech sector. Oracle remains the project’s planned main tenant and says it does not expect a delay.
Oracle seeks protection against project delays
Oracle sent the notice to the project’s developer as construction and regulatory challenges raise questions about the campus’ timeline. The company is seeking the ability to delay payments if the facility does not become operational in 2028 as planned, according to reports.
Force majeure provisions can address contractual obligations affected by circumstances outside a party’s control. The notice does not indicate that Oracle is withdrawing from the project, and the specific contractual consequences remain subject to the agreement’s terms.
Oracle said in a statement, “Oracle Project Jupiter remains on our planned schedule.” The company added that it remains committed to New Mexico and is confident in its plans.
Energy and permitting issues challenge construction
Oracle Project Jupiter is designed to support approximately 2.45 gigawatts of capacity. The campus depends on energy infrastructure, including gas-powered fuel cells supplied by Bloom Energy, making fuel availability an important part of its development schedule.
An Energy Transfer pipeline intended to supply gas to the site has faced permitting delays. Its expected completion has moved to Feb. 1, 2027, while a separate air-quality permit for the fuel cell system remains pending, according to a report.
The project has also faced opposition from local residents and environmental groups. These disputes add regulatory and community challenges to the construction of a major AI infrastructure facility.
Blue Owl defends project’s financial commitments
Blue Owl Capital, whose unit is developing the campus, said the notice does not change the project’s financial commitments. The statement seeks to distinguish the contractual notice from any change in the project’s broader financing arrangements.
“This notice does not change the financial commitments to this multi-year project,” Blue Owl said in a statement.
Oracle’s notice comes as technology companies expand spending on data centers to support artificial intelligence workloads. Oracle Project Jupiter forms part of the broader Stargate AI infrastructure initiative involving Oracle, OpenAI and SoftBank.
Oracle shares fell during Thursday trading after news of the notice emerged. The market response highlights investor attention to the costs, timing and financing of major AI infrastructure projects.
Oracle continues to maintain that Oracle Project Jupiter remains on schedule, a position it reiterated in comments to CNBC. The project’s progress will depend on construction, energy infrastructure and the resolution of outstanding regulatory issues.
