Oracle has invoked a contractual safeguard over its massive New Mexico data center by sending a formal “force majeure” notice to a unit of Blue Owl Capital, the developer behind Project Jupiter.
The move, first reported by Bloomberg on Thursday, could allow Oracle to delay certain payments if the facility fails to open on schedule.
The Silicon Valley giant is not abandoning the project. The notice instead protects the company from certain financial obligations if the controversial project misses its 2028 opening target as construction faces delays involving energy infrastructure and regulatory approvals.
A massive campus built for AI
A 1,400-acre campus in southern New Mexico, Project Jupiter is part of the Stargate initiative involving Oracle, OpenAI and SoftBank. It is designed to support approximately 2.45 gigawatts of computing capacity, requiring a substantial and reliable power supply.
Stack Infrastructure, a Blue Owl portfolio company, is developing the facility, with Oracle as its principal tenant.
The project has been promoted as a major investment in New Mexico, with developers highlighting its potential economic benefits. But securing the infrastructure needed to operate the campus has proved difficult.
Pipeline delays threaten power plans
A natural gas pipeline intended to supply the facility has been delayed by nearly six months, pushing its expected service date to February 1, 2027.
The Energy Transfer pipeline’s setbacks followed repeated permit denials by the New Mexico State Land Office. The proposed route was subsequently changed.
Project Jupiter is designed to use gas-powered fuel cells supplied by Bloom Energy.
A separate air-quality permit for the fuel-cell system remains pending.
The delays have added pressure to a project targeting a 2028 opening.
Opposition over water and air quality
Project Jupiter has also faced opposition from residents and environmental groups concerned about water consumption, air pollution, and the development’s impact on the surrounding area near the US-Mexico border.
Oracle has conducted public outreach in New Mexico as criticism of the project has grown.
The development has also become a subject of political debate ahead of the 2026 midterm elections.
What Oracle’s notice means
Force majeure clauses are commonly included in large construction and infrastructure contracts. They address circumstances beyond a party’s control that interfere with contractual obligations.
Oracle’s notice does not automatically declare the project delayed or cancel its financial commitments.
Bloomberg reported that the provision could allow Oracle to postpone rent payments under certain circumstances. The precise effect depends on the contract and whether the circumstances meet its force majeure provisions.
Oracle insists Project Jupiter remains on track. “Project Jupiter remains on our planned schedule,” an Oracle spokesperson said. “We are fully committed to New Mexico and confident in our path forward.”
The company described force majeure notices as commonplace on projects of this scale and said they do not automatically signal delays.
Blue Owl offered a similar response. “This notice does not change the financial commitments to this multiyear project,” a spokesman said.
Investors watch the costs
The notice comes as Oracle faces growing scrutiny over the enormous expense of expanding its AI infrastructure.
Debt associated with Project Jupiter has reportedly traded under pressure, while Oracle’s shares also fell following the news.
The concerns reflect the financial challenge of building data centers that can support increasingly demanding AI systems.
Such projects require enormous investments in land, construction, power generation and supporting infrastructure — often years before they begin generating returns.
For Oracle, the force majeure notice provides contractual protection as it works to keep one of its most ambitious AI projects moving toward completion.
