The data center Oracle is building in southern New Mexico is called Project Jupiter, a campus designed to draw 2.45 gigawatts of power. On Wednesday, Oracle sent the project’s developer a notice saying, in effect, that it may not have to keep paying if the thing is not ready on time.
Oracle sent a force majeure notice to the developer of its New Mexico AI data center, a unit of Blue Owl Capital, according to people familiar with the situation. The notice would let Oracle delay payments if the campus does not come online as planned in 2028.
Oracle shares fell more than 5 percent at one point during Thursday trading after the news was reported, and Blue Owl declined as well. Oracle said it remains “fully committed to New Mexico and confident in our path forward.” A representative for Blue Owl, which owns the data-center developer Stack Infrastructure, declined to comment.
Blue Owl has said the notice does not change the funding commitment behind a multiyear project. But the exchange lays bare the strain the project has been under, and the lengths Oracle is going to protect itself from costs on a buildout that has faced local opposition and regulatory setbacks.
Project Jupiter is part of Stargate, the AI infrastructure program announced alongside President Donald Trump in the early days of his second term, with Oracle, OpenAI and SoftBank as partners. OpenAI signed a $400 billion deal with Oracle and SoftBank last year covering five U.S. data centers, including the New Mexico site.
The New Mexico campus has drawn opposition from the start. Local groups have questioned its water and power demands in an arid region, and the project has faced regulatory hurdles that slowed its path. Oracle has responded with a public push in the state, pledging jobs and investment, but the schedule has remained a point of friction.
Blue Owl bought into the data-center boom through Stack Infrastructure, and the New Mexico site is among the largest projects in its portfolio. The firm has committed equity to the development, which is why Oracle’s notice, and the possibility that payments could pause, landed directly on Blue Owl’s shares.
The cost is visible in Oracle’s accounts. Regulatory filings show the company’s capital spending reached $28.5 billion in the quarter ended Aug. 31, up from $8.5 billion a year earlier, and free cash flow was negative $5.4 billion. Oracle has said it plans to raise about $40 billion through debt and equity in its current fiscal year.
The company also raised its estimate for the total cost of a 2026 restructuring plan by about $700 million, to roughly $2.8 billion, adding to the financial weight of a company that has pivoted hard toward AI infrastructure.
A force majeure notice is a legal mechanism normally reserved for events outside a party’s control, such as war, natural disaster or government action. Oracle’s use of it here, according to people familiar with the matter, is aimed at giving the company room to slow payments if the New Mexico campus slips, shifting the cost of delay toward the developer.
The notice also arrives as the entire industry’s financing model shifts. Oracle has been the clearest example of a hyperscaler borrowing heavily to fund its buildout, and analysts have flagged its lease obligations as among the largest relative to its size. Any sign that a marquee project may slip feeds the broader question of whether the spending can be sustained.
The standoff matters beyond one project. Oracle has become the most aggressive of the hyperscalers in committing to data-center capacity, signing leases with fifteen- to nineteen-year terms that tie it far into the future. If a flagship project slips, the ability to delay payments becomes a financial tool as much as a legal one.
Investors are watching the same arithmetic. Oracle’s pivot has sent capital spending sharply higher and free cash flow negative, and the stock has become a proxy for the AI buildout more broadly. When Oracle signaled uncertainty about one of its largest projects, the market read it across the sector, and shares of other cloud and computing companies slipped alongside it.
Stargate was billed as a plan to keep AI computing capacity inside the United States, and New Mexico was among the first sites named. Delays there carry weight beyond Oracle’s own books, because the project sits inside a national effort whose timeline is now a matter of public debate.
Oracle has described the notice as a routine step tied to the project’s schedule, and people familiar with the matter said the company remains committed to the buildout. Still, the market’s reaction showed how little margin for delay investors now grant a company whose entire strategy rests on delivering data-center capacity on time.
For now, Oracle insists the project is on track, and Blue Owl insists the money will keep flowing. The force majeure notice is the hedge Oracle has kept in reserve, and its existence tells the market how much is riding on a single campus in the New Mexico desert.
