Oracle triggers ‘force majeure’ on data center project over power delays, source says
Oracle has issued a "force majeure" notice to Blue Owl, the developer of its "Project Jupiter" data center in New Mexico, due to potential delays in securing power. This action allows Oracle to delay payments if the data center, which is part of a broader AI infrastructure initiative, does not come online as planned in 2028. The project has also faced other infrastructure setbacks and legal challenges concerning water and air-quality permits.
Oracle has invoked a "force majeure" clause with Blue Owl, the developer of its large "Project Jupiter" data center campus in New Mexico, citing potential delays in securing power for the project. This contractual move, reported by Reuters and Bloomberg News, could allow Oracle to delay payments if the data center fails to come online as planned in 2028. Under the contract, Oracle is responsible for securing power for the site.
Blue Owl, which owns data center developer Stack Infrastructure, holds approximately $3 billion in equity in the project. Despite the force majeure notice, Blue Owl stated that its financial commitments to the multi-year project remain unchanged. However, Oracle's action extends the period during which it pays Blue Owl the lower development-stage rent.
The 1,400-acre Project Jupiter campus, which reportedly secured $18 billion in loans, is part of the "Stargate" initiative, a $500 billion investment to build AI infrastructure in the US with partners like OpenAI and SoftBank Group. The project has reportedly encountered multiple infrastructure setbacks, including delays for a natural-gas pipeline and existing legal challenges concerning water and air-quality permits. The broader AI infrastructure build-out faces increasing challenges in securing resources and managing costs amidst growing public opposition over local energy and water impacts.