New Mexico AI Campus Hits Regulatory Wall
Oracle Corp has sent a force majeure notice to Blue Owl Capital, the developer behind Project Jupiter, it’s 2.45-gigawatt data center campus under construction in New Mexico, according to Bloomberg, which cited people familiar with the matter. The move is designed to let Oracle delay lease payments, not exit the project, should the facility fail to come online as planned in 2028.
The notice adds to a run of setbacks at Project Jupiter, envisioned as a 1,400-acre, four-building campus and one of the anchor sites in the $400 billion Stargate infrastructure pact Oracle and SoftBank signed alongside OpenAI. The site is being developed by STACK Infrastructure, a Blue Owl portfolio company, with additional equity from Blue Owl-managed funds.
At the center of the dispute is a natural gas pipeline being built by Energy Transfer LP to power the campus via Bloom Energy fuel cells. The line was expected to enter service this month, but the New Mexico State Land Office has repeatedly denied permits for the proposed route, pushing the in-service date back roughly six months to February 1, 2027.
Both companies have moved to downplay the significance
An Oracle spokesperson told CNBC, “Project Jupiter remains on our planned schedule.” Oracle vice president Michael Egbert struck a similar tone in a statement to the Santa Fe New Mexican, adding that “force-majeure notices are commonplace in developments of this scale and are often used to preserve contractual rights among project partners.” Blue Owl, for its part, told Bloomberg Law that “this notice does not change the financial commitments to this multiyear project.” Oracle sends ‘force majeure’ notice about data center project — stock drops 3%
Markets read it differently. Oracle shares fell more than 4% in premarket trading on the news, with Blue Owl and Bloom Energy also declining. According to Bloomberg’s reporting, if the two sides agree a force majeure event has genuinely occurred, Oracle could secure as long as a three-year delay on rent once payments would otherwise begin — though it would remain on the hook for interim costs and the full lease term once payments start.
Why it matters for the sector
Project Jupiter has become something of a bellwether for the broader AI data center buildout: a marquee, politically touted investment now colliding with the practical limits of permitting, grid capacity and local opposition. Oracle’s own financials underscore the stakes — the company has been running deeply negative free cash flow as it races to fund AI infrastructure commitments, and credit rating agencies have already flagged the strain. A contractual maneuver at its flagship site, even one both parties insist is routine, signals that hyperscalers are actively hedging against construction and power-delivery risk rather than assuming AI capex growth will proceed unimpeded.
Whether Project Jupiter is genuinely delayed remains unconfirmed by either party. What’s clear is that the mechanics of financing gigawatt scale AI campuses, power procurement, permitting timelines, and lease structuring are now front and center for investors watching the sector.
