Oracle obligated to pay data center investors despite power issues

Oracle tried to hit the emergency brake on one of the largest data center projects ever conceived. The brake didn’t work.

On September 24, Oracle issued a force majeure notice to Blue Owl Capital’s Stack Infrastructure unit regarding Project Jupiter, the tech giant’s sprawling AI data center campus in southern New Mexico. Force majeure clauses are supposed to be the contractual equivalent of an act-of-God exemption, letting parties off the hook when circumstances beyond their control make performance impossible. Oracle invoked it over power infrastructure complications. But the fine print of its agreements tells a different story: Oracle remains contractually obligated to continue paying debt costs and cannot terminate the lease, regardless of whether the site ever gets plugged in.

What happened at Project Jupiter

Project Jupiter is not a modest undertaking. The campus spans roughly 1,400 acres and is designed to deliver approximately 2.45 gigawatts of power capacity when fully operational. The project is part of Oracle’s broader commitment exceeding $300 billion for AI infrastructure.

The target was to begin operations in 2028. The force majeure notice signals that timeline is now in question, primarily because of complications surrounding natural gas pipeline access needed to fuel Bloom Energy fuel cells at the site.

The pipeline issues aren’t the first headache. Project Jupiter has already encountered multiple rejections for necessary permits and legal challenges related to environmental concerns. Local opposition has added another layer of friction to the buildout.

The money still flows

Blue Owl Capital holds approximately $3 billion in equity in the project, and the whole thing is financed by around $18 billion in bank loans. Despite the force majeure declaration, both Oracle and Blue Owl have stated that it does not alter financial commitments or project timelines. Oracle’s contractual structure means the company must keep servicing the debt whether or not the campus is generating revenue. It cannot walk away from the lease.

Oracle’s stock fell approximately 4-5% following the announcement.

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