Oracle (NASDAQ: ORCL) stock fell nearly 6% in pre-market trading on Thursday, September 24, following reports that the company had issued a force majeure notice related to its New Mexico data center project. The notice seeks protection against potentially higher costs, and according to Bloomberg, Oracle is seeking to delay payments for the campus, known as Project Jupiter, if the facility fails to come online as expected in 2028.
Oracle sent the notice to a Blue Owl Capital (NYSE: OWL) unit, the project's developer. Blue Owl Capital's shares also declined nearly 2% on Thursday following the report.
Force majeure provisions are generally used to suspend or modify contractual obligations when unforeseen circumstances prevent a party from fulfilling an agreement. Oracle maintains that Project Jupiter remains on schedule.
Infrastructure and Power Challenges
Project Jupiter is expected to support up to 2.45 gigawatts of power capacity as part of the broader Stargate artificial intelligence infrastructure initiative. Oracle has partnered with Bloom Energy (NYSE: BE), whose stock tumbled almost 7%, to power the facility using solid oxide fuel cells, which require significantly less water than conventional power generation.
The reduced water requirement is particularly important in New Mexico, where water availability has become a major consideration for large-scale data center development. However, the fuel cells require a reliable supply of natural gas, which represents another potential constraint for the project.
Pipeline and Permitting Delays
The project depends on a planned 17-mile natural gas pipeline known as the Green Chile Project, operated by Energy Transfer (NYSE: ET). The pipeline has been delayed from its original August 2026 target to February 2027 after the New Mexico State Land Office repeatedly denied right-of-way permits across state trust lands.
Without the pipeline, Bloom Energy's fuel cells would not be able to provide the planned power supply to the data center, potentially creating another obstacle to Project Jupiter's development.
The project has also encountered local opposition to data center development ahead of the upcoming midterm elections, while environmental groups have raised concerns over the potential impact of the facility.
