TL;DR
Oracle has invoked force majeure on Project Jupiter, the 2.45-gigawatt New Mexico data center at the heart of the Stargate AI buildout, signaling that regulatory and infrastructure delays could push the facility past its 2028 target and trigger a three-year rent deferral.
What happened
- Oracle sent a force majeure notice to Blue Owl Capital's Stack Infrastructure unit over Project Jupiter, its anchor data center in New Mexico under the Stargate initiative.
- The clause, if accepted by both parties, would let Oracle delay rent payments by three years once they begin, while still owing interim costs and the full lease term thereafter.
- New Mexico regulators denied a key energy permit, and an Energy Transfer natural gas pipeline originally due online this month has been pushed back to February 1, 2027, nearly six months late.
- The facility is designed for 2.45 gigawatts of power (roughly 1.8 million homes) and relies on Bloom Energy fuel cells fed by the delayed pipeline.
- About 20 banks provided an $18 billion construction loan; project debt was trading below 90 cents on the dollar and Oracle's credit-risk gauge hit a record high the day the notice was reported.
Why it matters
- Oracle stock fell 4.4 percent on the day of the report, part of a 29 percent slide year-to-date; Blue Owl shares dropped 3.7 percent, showing market confidence is eroding fast.
- The $400 billion OpenAI-Oracle-SoftBank deal signed last year to support five U.S. data centers, including this site, is now visibly under stress before a single rack goes live.
- $18 billion in bank debt trading at a discount means lenders are pricing in real default risk, not just contractual posturing, even though sources say the notice does not constitute an event of default.
- Regulatory friction in New Mexico has become a political flashpoint ahead of U.S. midterms, with residents learning the Oracle-OpenAI connection only after local approvals were already granted, fueling a backlash Oracle is now trying to manage.
- Law firm Quinn Emanuel warned in June that force majeure in AI data center contracts is "a core litigation and risk-allocation tool" that can cascade through construction, power, insurance, and financing documents simultaneously.
What to watch next
- Whether Blue Owl formally accepts the force majeure claim: acceptance triggers the rent delay mechanism and sets a legal precedent for how power-related disruptions are handled across the broader Stargate portfolio.
- The February 1, 2027 pipeline service date from Energy Transfer: another slip would almost certainly confirm a 2028 delivery miss and harden Oracle's contractual position.
- OpenAI's response: as the end customer on a $400 billion commitment, any signal that it is renegotiating terms or redirecting capacity to alternative sites would mark a significant escalation.
Originally published on Present of AI, a daily source-linked AI news timeline. Read the full timeline or browse the open dataset.