Oracle has issued a notice warning that it may delay payment to the developer of its Project Jupiter data centre complex in New Mexico if it is unable to come online within its expected timeframe.
The notice, first reported by Bloomberg and later confirmed by the company on social media site X, invokes force majeure, a legal principle that both parties may be freed from an obligation if extraordinary or uncontrollable circumstances render it unfulfillable.
The notice cites potential delays to the project due to fierce local opposition and New Mexico state officials refusing to allow it to run a natural gas pipeline to the data centre site.
In this case, a person familiar with the project told Reuters, Oracle is not seeking to exit the project entirely but rather to delay payments to Blue Owl, the alternative investment firm that owns data centre developer Stack Infrastructure.
Oracle cannot terminate the lease under any circumstances, the source told Reuters, adding that Blue Owl has put around $3 billion of private capital into the project and Oracle is responsible for paying the debt costs even if rent payments are delayed.
Citing people familiar with the matter, the Financial Times has reported that Oracle would be liable to pay a “carry cost” in lieu of rent payments for up to three years if the site does not become operational by the planned start date in early 2027.
In its post on X, Oracle said that the project remains on its planned schedule and it is confident in its path forward.
“Force-majeure notices are commonplace in developments of this scale and are often used to preserve contractual rights among project partners,” it added. “They do not, by themselves, establish a project delay or change delivery expectations.”
The project is intended to form the heart of Oracle’s $300 billion compute provision to OpenAI, but has run into trouble after state officials refused its request to connect it to 2.2 gigawatts of natural gas turbines. The FT reported last week that debt for the project is now trading at 89 to 90 cents on the dollar, significantly below ranges expected for healthy debt.
However, on 17 September the project received the green light from a judge to instead power the site with Bloom fuel cells, which produce fewer pollutants. Bloom confirmed on X yesterday that Oracle remains committed to both Project Jupiter and its contract with Bloom.
This has not been enough to protect Oracle’s share price, however. Already down over 50 per cent since September 2025, its shares have fallen a further 7 per cent over the past five days, with around three points lost after the force majeure notice was reported.
