Oracle filed a force majeure notice on Project Jupiter, a 2.45-gigawatt data center facility under development in Doña Ana County, New Mexico for OpenAI. The notice, sent to Blue Owl Capital, a unit involved in the project's development, triggered a roughly 4% decline in Oracle's stock price on Thursday.
The force majeure clause allows Oracle to postpone payments related to Project Jupiter if the facility fails to launch by its planned 2028 completion date. Under the existing agreement, Oracle is responsible for securing power to the facility and cannot terminate the lease.
Project Jupiter represents a substantial financial commitment. Blue Owl, which owns developer Stack Infrastructure, has approximately $3 billion in equity invested in the project, while Oracle covers the debt costs. The project has raised about $18 billion from banks and faces challenges including delays in natural gas pipeline infrastructure and legal disputes over air quality and water permits. Blue Owl expects a 9% return during construction and an 11% return upon successful completion.
Oracle stated that the force majeure notice is a standard protective measure for projects of this scale and does not indicate project delays. Michael Egbert, Oracle's Vice President, said that "Project Jupiter remains on our planned schedule" and that the company is "fully committed to New Mexico." Blue Owl indicated it is not changing its financial commitments to the project.
The market reaction reflected broader investor concerns about AI infrastructure financing. Market declines extended to chip manufacturers including Nvidia, AMD, and Micron, signaling investor sensitivity to Oracle's progress in AI infrastructure development.
The timing of payment obligations relative to project completion has drawn analyst attention. KeyBanc analyst Jackson Ader noted that Oracle faces a tenuous cash position compared to other major hyperscalers and may feel payment pressures more acutely than larger, more cash-rich competitors. However, William Blair indicated limited near-term concern, noting that Project Jupiter contributes no revenue to Oracle's fiscal 2027 results.
Oracle's broader AI infrastructure expansion remains substantial. The company reported $28.5 billion in capital expenditures for the first quarter of the fiscal year and carries $125 billion in senior notes and long-term borrowings. Remaining performance obligations total $664 billion. In February, Oracle announced plans to raise $45 billion to $50 billion during the year to expand capacity for customers including OpenAI, Nvidia, AMD, Meta, and xAI.
The Project Jupiter commitment forms part of a larger partnership between Oracle and OpenAI focused on providing 4.5 additional gigawatts of Stargate capacity as part of a broader $500 billion US infrastructure initiative.
According to Oracle's latest SEC filings, the company's cloud infrastructure revenue increased by 121%. S&P Global downgraded Oracle's credit rating in July.
Oracle confirmed that Project Jupiter construction currently employs over 3,600 workers and projects over $4.7 billion in economic benefits for New Mexico.
