Oracle Corp. has sent a force majeure notice to a unit of Blue Owl Capital over Project Jupiter, the New Mexico data center at the center of the Stargate AI build-out. This contractual clause is invoked when a company believes that unavoidable events will delay completion of the work, which seems to be Oracle’s opinion of its troubled data center project.
Bloomberg reports that the notice doesn’t mean Oracle is walking away as the project’s main tenant. According to the sources, Oracle is trying to buy itself room to delay payments if the data center doesn’t come online in 2028 as planned. If both sides agree that a force majeure event tied to power commitments has occurred, Oracle could secure a three-year delay on rent once payments begin. It would still owe other interim costs, and once rent does start, it would owe for the full lease term.
Oracle played down the move in a statement. “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 pushed back harder. “This notice does not change the financial commitments to this multiyear project,” a company spokesman said, adding that the two sides remain “fully aligned on Project Jupiter.” One of the people familiar with the matter said the notice doesn’t amount to 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” at the time, saying it involved a scale “nobody’s really ever seen.” The New Mexico site is designed to handle 2.45 gigawatts of power, enough, by one description, to supply roughly 1.8 million homes at any given moment. Stack Infrastructure, a Blue Owl portfolio company, is building the facility, with Blue Owl-managed funds providing equity.
The project has undeniably run into trouble. New Mexico regulators denied a permit central to its energy resource plans, and it 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 set to begin service this month; it’s now been pushed back nearly six months, to February 1, 2027, after the New Mexico State Land Office repeatedly rejected a proposed route. The facility is meant to run on gas-powered fuel cells supplied by Bloom Energy Corp.
Documents previously reviewed by Bloomberg show that before the project was publicly revealed, its developers worked with local officials on an incentive package and a rollout strategy. Residents didn’t learn the venture was tied to Oracle and OpenAI until after it had already been approved. Oracle has since launched what amounts to a charm offensive in New Mexico to win back skeptics. “We are fully committed to New Mexico and confident in our path forward,” an Oracle spokesperson said.
Money is at stake well beyond the two companies. About 20 banks put together an $18 billion loan to help finance construction of the data center campus. Debt tied to the project was trading below 90 cents on the dollar, according to a person with knowledge of the matter, and a gauge of Oracle’s credit risk 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 slide 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. Earlier this year, in a similar arrangement elsewhere in the AI buildout, Google agreed to pay Elon Musk’s SpaceX for computing power through mid-2029, while reserving the right to terminate the deal if it didn’t gain access by a certain date.
Law firm Quinn Emanuel Urquhart & Sullivan LLP flagged 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.”
AI data centers and the integration of this technology is changing the political landscape. Breitbart News social media director Wynton Hall has written his New York Times bestseller Code Red: The Left, the Right, China, and the Race to Control AI to serve as the definitive guide on how the MAGA movement can create positions on AI that benefit humanity without handing control of our nation to the leftists of Silicon Valley or allowing the Chinese to take over the world.
Read more at Bloomberg here.
Lucas Nolan is a reporter for Breitbart News covering issues of AI, free speech, and online censorship.
Read the full article here
