Oracle invokes force majeure to shield itself from massive, controversial AI data center project; shares sink 5%

Oracle has invoked force majeure protections tied to Project Jupiter, a massive planned AI data center in New Mexico, seeking to limit its financial exposure if the facility misses its 2028 opening target.

The move sent Oracle shares down 5% on Thursday and renewed attention to one of the largest and most controversial AI infrastructure projects under development.

Bloomberg first reported the notice, citing people familiar with the matter. Oracle sent it to a unit of Blue Owl Capital, the project’s developer.

“Oracle Corp. is moving to shield itself from racking up expenses on a massive data center being built in New Mexico, adding a fresh wrinkle to a project beset by opposition and regulatory setbacks,” Bloomberg reported.

The notice does not mean Oracle is walking away.

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

Instead, Oracle is seeking protection from certain payment obligations if delays prevent the campus from coming online as planned.

Blue Owl said the notice does not alter the project’s financial commitments.

“This notice does not change the financial commitments to this multi-year project,” Blue Owl Capital said in a statement to CNBC.

The distinction matters. Oracle remains the expected primary tenant, but the notice gives the company contractual protection if forces outside its control derail the timeline.

AI’s infrastructure boom is colliding with real-world constraints

Project Jupiter is expected to require about 2.45 gigawatts of capacity, placing it among a new class of enormous data center developments being planned for AI workloads.

At that scale, building a data center is no longer just a construction problem.

Projects depend on electricity generation, transmission lines, permitting, financing, water access, equipment, local approvals, and enough skilled labor to keep construction moving. A delay in any one of those areas can push a launch date back months or years.

That is where Oracle’s force majeure notice becomes more significant.

AI companies and cloud providers have committed hundreds of billions of dollars to infrastructure, but much of that spending assumes facilities will be completed on schedule. If projects slip, the financial consequences can spread across tenants, developers, lenders, utilities, contractors, and equipment suppliers.

Project Jupiter has already faced regulatory hurdles and local opposition. The New Mexico development is part of the broader Stargate AI infrastructure buildout associated with Oracle, OpenAI, SoftBank, and the Trump administration.

Environmental groups have raised concerns around data center development, and local opposition has become more visible as communities weigh the economic benefits of AI infrastructure against demands on electricity, water, and land.

Oracle has tried to separate those concerns from its near-term financial outlook.

Co-CEO Clay Magouyrk told analysts during the company’s Sept. 10 earnings call that Project Jupiter would not affect Oracle’s previously stated fiscal 2027 revenue or earnings guidance.

Financial pressure around the project continues to draw attention. The Financial Times has reported that roughly $18 billion in debt tied to the data center is already trading at stressed levels.

Project Jupiter shows where the AI infrastructure race may get harder from here.

The industry has spent years worrying about access to GPUs. The next constraint may be more mundane: whether enough electricity, financing, permits, transmission capacity, and construction resources can come together at the same place, at the same time, and on the schedule written into the contracts.

Oracle Founder: Larry Ellison