Oracle sent a force majeure notice to its New Mexico data center developer, Blue Owl Capital, seeking to protect itself from cost increases if Project Jupiter misses its 2028 target.
Corporate ambition meets grid reality in New Mexico, where Oracle is quietly insulating its balance sheet from the friction of the artificial intelligence boom. The enterprise tech giant notified its developer that it is invoking force majeure clauses for a massive facility known as Project Jupiter, according to Bloomberg reporting that rattled markets on Thursday.
Shares of Oracle fell 4% in premarket and morning trading following the disclosure. Blue Owl Capital, whose unit is handling the development of the campus, also saw its shares dip more than 1% as investors digested the legal maneuver.
Project Jupiter and the 2028 Timeline Stakes
At the center of the dispute is a massive data center planned for New Mexico designed to handle 2.45 gigawatts of power. The site serves as a cornerstone for the sprawling AI infrastructure buildout unveiled last year alongside OpenAI and SoftBank.
Despite invoking the contract clause, Oracle insists it is not walking away from its position as primary tenant. Instead, the company aims to defer payment obligations if construction delays push the opening past 2028.
“Project Jupiter remains on our planned schedule,”
Oracle spokesperson
“We are fully committed to New Mexico and confident in our path forward.”
Oracle spokesperson
The developer offered a similar assessment of the financial agreements underpinning the multi-year venture. This notice does not change the financial commitments to this multi-year project,
Blue Owl Capital stated to CNBC.
Regulatory Backlash and Local Opposition in New Mexico
The New Mexico campus has faced significant headwinds since its inception. The project has wrestled with regulatory hurdles, including the denial of a key permit amid intensifying public backlash over soaring power demands and local environmental impacts.
These local tensions mirror a national trend of resistance. Data Center Watch released a report indicating that 45 projects worth $68 billion were blocked or delayed across the United States during the second quarter of the year, with roughly 30 statehouses introducing rules to curb development.
Debt Pressures and Broader Infrastructure Strains
Financial exposure extends beyond construction timelines. Market anxiety has intensified around Oracle’s $18 billion in debt tied to the data center, which has been trading at stressed levels according to financial reports.
The strain is not limited to New Mexico or a single corporate balance sheet. In Texas, Gov. Greg Abbott announced a complete pause on permit approvals for new data centers until exhaustive audits by the Electric Reliability Council of Texas and the state water development board ensure grid and water reliability.
“Simply put, Texans must come first, Data centers must pay their own way, protect our grid and water, and complete the ERCOT and TWDB audits. Until they do, (regulators) will issue no permits sought by data center projects.”
Gov. Greg Abbott, via Ibtimes
Legislative Pushback on Utility Costs
Federal lawmakers are also reacting to the rapid proliferation of energy-hungry facilities. The House passed the Ratepayer Protection Act by an overwhelming 417-3 vote, seeking to shield everyday utility consumers from footing the bill for massive grid upgrades required by tech campuses.
The legislation mandates that state regulators force large-load customers to cover the expenses of new power generation and provide upfront financial assurances before any grid modifications begin. Although the bill currently faces a hurdle in the Senate—where Republican Sen. Jon Husted requested unanimous consent for a vote without a roll call—the legislative momentum signals a shift in the political environment for AI infrastructure.