Oracle sends force majeure notice on New Mexico data center project

Oracle has issued a force majeure notice to a Blue Owl Capital unit developing Project Jupiter, a New Mexico data-center campus, CNBC reported. The oracle force majeure new mexico notice puts payment timing at issue for a major AI-computing buildout, though neither company has announced a revised completion date or disclosed the underlying contract terms.

CNBC said it confirmed that the recipient was a Blue Owl unit. Bloomberg first reported that Oracle is seeking to defer payments if the campus does not begin operating in 2028 as planned. Oracle said the project remains on schedule, while Blue Owl said the notice does not alter financial commitments to the multiyear development.

Why did Oracle send a force majeure notice for Project Jupiter?

Reuters, citing a person familiar with the matter, reported that Oracle cited potential delays in securing power for the site. The person said Oracle is responsible for securing power under the contract. That account has not been supported by a published notice or lease, so the precise trigger and the parties' legal rights are not public.

A force majeure provision can excuse or postpone contractual obligations when circumstances outside a party's control disrupt performance. In this case, the reported purpose is to delay payments if Project Jupiter misses its planned 2028 start, rather than to establish that Oracle is leaving the project. Reuters reported, based on the same unnamed source, that the arrangement would extend the period in which Oracle pays development-stage rent and delay the start of a higher rent phase. Those details have not been publicly confirmed by Oracle or Blue Owl.

Oracle told CNBC: “Project Jupiter remains on our planned schedule.” The company also said it remains committed to New Mexico. Blue Owl told CNBC that the notice “does not change the financial commitments to this multi-year project.” Neither statement addresses what payments are covered by the notice or whether the parties disagree over the source of any potential delay.

What obstacles has the New Mexico data center faced?

CNBC reported that Project Jupiter has encountered regulatory hurdles, local opposition and delays in construction of a natural-gas pipeline intended to fuel the facility. Reuters separately reported that the campus has faced reported pipeline delays and legal challenges involving water and air-quality permits. Those reported obstacles provide context for the power concern, but they do not establish that the project will miss its 2028 target.

The site is part of Oracle's effort to expand cloud infrastructure for AI workloads. CNBC reported that Bloom Energy is slated to provide fuel cells for the facility, described as more than 2.4 gigawatts. Oracle co-CEO Clay Magouyrk said on the company's Sept. 10 earnings call that Project Jupiter would not affect Oracle's previously stated fiscal 2027 revenue or earnings guidance, CNBC reported.

For Oracle's customers, developers and financing partners, the immediate issue is whether energy supply can be secured in time for the planned operating date. The notice does not by itself answer that question. Oracle and Blue Owl have not disclosed a new timetable, payment amount or a change to the project's stated financial commitments.

This story draws on original reporting from SiliconANGLE.