Oracle invokes force majeure on 'Project Jupiter' AI data-center build, citing unforeseen obstacles.

Oracle Corp. has sent a force majeure notice to a unit of Blue Owl Capital regarding Project Jupiter, the New Mexico data center at the heart of the Stargate AI build-out. This contractual clause is invoked when a company believes that unavoidable events will delay completion of the work—Oracle's apparent view of its troubled data center project.

According to Bloomberg, the notice doesn't mean Oracle is walking away as the project's main tenant. Rather, Oracle is attempting to secure room to delay certain payments if the data center doesn't come online as planned in 2028. Should both parties agree that a force majeure event related to power commitments has occurred, Oracle could secure a three-year delay on rent once payments begin, though it would still owe interim costs and eventually the full lease term.

Oracle played down the significance of the move. "Force-majeure notices are commonplace in developments of this scale and are often used to preserve contractual rights," a company spokesperson said. "They do not, by themselves, establish a project delay or change delivery expectations."

Blue Owl responded more forcefully. "This notice does not change the financial commitments to this multiyear project," a company spokesman said, adding that both sides remain "fully aligned on Project Jupiter." According to sources familiar with the matter, the notice doesn't constitute an event of default under the project's financing agreement.

Project Jupiter is part of the Stargate AI infrastructure initiative that President Donald Trump unveiled early in his second term alongside executives from Oracle, OpenAI, and SoftBank Group Corp. Trump called it a "tremendous investment," noting the scale "nobody's really ever seen." The New Mexico site is designed to handle 2.45 gigawatts of power—enough to supply roughly 1.8 million homes at any given moment. Stack Infrastructure, a Blue Owl portfolio company, is building the facility with equity from Blue Owl-managed funds.

The project has undeniably encountered significant obstacles. New Mexico regulators denied a permit central to its energy resource plans, and the initiative has become a political flashpoint heading into the U.S. midterm elections. A natural gas pipeline that Energy Transfer LP is developing to fuel the site was originally scheduled to begin service this month; it has now been delayed nearly six months, to February 1, 2027, following repeated rejections of the proposed route by the New Mexico State Land Office. Bloom Energy Corp. will supply the gas-powered fuel cells that run the facility.

Before the project's public unveiling, its developers worked with local officials on an incentive package and rollout strategy, as shown in documents previously reviewed by Bloomberg. Residents didn't learn the venture involved Oracle and OpenAI until after approval had already been granted. Oracle has since launched an extensive public relations campaign in New Mexico to win back skeptics. "We are fully committed to New Mexico and confident in our path forward," an Oracle spokesperson said.

The financial stakes extend well beyond the two companies. About 20 banks assembled an $18 billion loan to finance construction of the data center campus. Debt tied to the project was trading below 90 cents on the dollar, and Oracle's credit risk indicators hit a record high on Thursday. Oracle's stock fell 4.4 percent in New York on the day the notice was reported, part of a 29 percent decline so far this year. Blue Owl shares dropped 3.7 percent.

OpenAI signed a $400 billion deal with Oracle and SoftBank last year to support five U.S. data centers, including the New Mexico project. In a parallel arrangement, Google agreed to pay Elon Musk's SpaceX for computing power through mid-2029 while reserving the right to terminate if it didn't gain access by a specified date.

The law firm Quinn Emanuel Urquhart & Sullivan LLP highlighted the growing importance of such clauses in a June client alert on AI infrastructure contracts. "In AI data center projects, force majeure is no longer a back-end boilerplate provision," the firm wrote. "It is a core litigation and risk-allocation tool that can determine whether a delay remains isolated, or cascades through the project's construction, customer, power, insurance, and financing documents."