Oracle Cites Force Majeure for New Mexico Data Center
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Oracle Cites Force Majeure for New Mexico Data Center
- Oracle has issued a "force majeure" notice to the developer of its large artificial intelligence (AI) data center project in New Mexico, seeking to protect itself from potential cost increases and delays.
- The notice, sent to a unit of alternative asset manager Blue Owl Capital, aims to allow Oracle to defer contractual payments if the facility, internally named Project Jupiter, misses its planned 2028 operational target.
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Oracle has sent a “force majeure” notice to the developer of its massive AI data center project in New Mexico, a unit of Blue Owl Capital. This action, reported on Thursday, September 24, 2026, is an attempt by Oracle to shield itself from potential rising costs and liabilities associated with the “Project Jupiter” facility.
A force majeure clause in a contract typically allows parties to suspend or be excused from contractual duties when unforeseen and uncontrollable events prevent performance. In this instance, Oracle is reportedly seeking the right to delay payments if the data center does not become operational as expected in 2028. Oracle’s shares fell 4% following the news.
The Project Jupiter data center is a cornerstone of the broader Stargate AI infrastructure initiative, which was publicly announced by President Donald Trump alongside executives from Oracle, OpenAI, and SoftBank Group. The facility, located in Doña Ana County, New Mexico, is designed to be powered by Bloom Energy fuel cells, which require a natural gas supply. However, the project has faced obstacles, including community opposition and regulatory hurdles, particularly regarding the construction of a 17.8-mile natural gas pipeline. The New Mexico State Land Office rejected rights-of-way for the pipeline in March and again in July, citing environmental concerns such as emissions and strain on local resources. The pipeline’s start date has been pushed back from August 2026 to February 2027.
Despite these challenges, an Oracle spokesperson affirmed on September 24, 2026, that “Project Jupiter remains on our planned schedule” and that the company is “fully committed to New Mexico.” Blue Owl Capital, the project’s developer, has also stated that the notice does not alter the financial commitments to the multi-year project. Oracle has committed significant investments to the region, including $50 million for local water infrastructure improvements and an expected $4.7 billion in long-term economic impact for the state and county.