Oracle Invokes 'Force Majeure' for New Mexico AI Data Center Facing Delay Risks

According to Bloomberg, tech giant Oracle (ORCL-US) has issued a 'force majeure' notice to Stack Infrastructure, a developer under Blue Owl Capital. Regarding the massive AI data center in New Mexico, codenamed 'Project Jupiter,' Oracle is attempting to delay payments to mitigate financial risks rather than directly terminating the lease, should the project fail to launch as planned by 2028.

'Project Jupiter' is designed with a power capacity of 2.45 gigawatts (GW), enough to supply approximately 1.8 million households. It is a flagship project for the $400 billion Stargate AI infrastructure being advanced by OpenAI, SoftBank (SoftBank), and Oracle. However, the project has recently faced setbacks due to regulatory defeats and local opposition. For example, the natural gas pipeline responsible for fuel supply has been repeatedly denied permits by the state land office, forcing the construction schedule to be delayed by nearly half a year.

While Oracle has responded that the project is proceeding as scheduled, the issuance of the force majeure notice has drawn the attention of lending banks.

Currently, this project is supported by loans totaling up to $18 billion from approximately 20 banks, but the price of related debt transactions has fallen to distressed levels below 90% of par.

Legal experts analyze that as the difficulty of building AI data centers increases, force majeure clauses have evolved from a standard contract addendum to a core legal tool for allocating risks related to power supply, financing, and construction delays.