Oracle Moves to Shield Itself From Delays at New Mexico AI Data Centre: Report

Oracle has issued a force majeure notice to the developer of Project Jupiter, a large AI data centre campus in Doña Ana County, New Mexico, seeking to protect its contractual position if the facility is delayed, Bloomberg reported. Oracle is not seeking to exit the project but is seeking to defer certain payments if the campus fails to come online in 2028 as planned, people familiar with the matter reportedly said.

Force majeure provisions can provide contractual relief when events beyond a party’s control prevent or delay it from meeting its obligations. 

In Oracle’s case, the notice comes amid delays and regulatory hurdles affecting Project Jupiter’s power infrastructure.

Oracle shares fell 3.5% on September 24 following reports of the notice, while Blue Owl, which owns Project Jupiter’s developer, closed 3.6% lower. 

“Project Jupiter remains on our planned schedule. We are fully committed to New Mexico and confident in our path forward,” Oracle said in a statement on X.

The project was initially designed around 2.2GW of gas turbines, but New Mexico’s State Land Office rejected Energy Transfer’s requests for rights-of-way and a lease needed for a natural-gas pipeline serving the site, according to reports. 

The pipeline route was reportedly subsequently changed, while its planned in-service date has been pushed to February 1, 2027, from August 15.

Oracle subsequently changed the power design, replacing the planned gas turbines and diesel generators with Bloom Energy fuel cells. 

The campus is designed to handle about 2.45GW, while Bloom is contracted to provide 2.4GW of fuel-cell capacity, according to TechCrunch. A separate air-quality permit for the fuel-cell system is also pending.

Bloom said it remains committed to Project Jupiter and its contract with Oracle. “Oracle remains committed to Project Jupiter and its contract with Bloom to deliver 2.4 GW of fuel cell capacity,” the company said on X. “We are excited to execute Project Jupiter on Oracle’s planned timeline.”

Oracle also pointed to the scale of construction already under way. More than 3,600 construction workers are currently working on the campus, including more than 1,000 New Mexico residents, the company said. More than 900 workers joined the project in August alone, while construction crews have logged more than 2.8 million hours.

Oracle estimates that Project Jupiter will generate more than $4.7 billion in long-term economic impact for New Mexico. The company has previously said the estimate assumes the project's air permit and pipeline are approved as planned.

Blue Owl, whose unit STACK Infrastructure is developing Project Jupiter, said the notice does not change the project’s financial commitments. “This notice does not change the financial commitments to this multiyear project,” a Blue Owl spokesperson said as quoted by several media outlets.

Project Jupiter is part of Oracle’s broader infrastructure agreement with OpenAI. The 1,400-acre campus is one of the data centres being developed to provide computing capacity under the companies’ multiyear agreement. 

The project has also been financed through about $18 billion in loans from a consortium of banks.