Power Constraints Push Oracle to Delay $18 Billion Data Center Campus
Oracle filed a force majeure notice with Blue Owl’s Stack Infrastructure over Project Jupiter, a 1,400-acre New Mexico data center campus backed by $18 billion in bank loans. The filing cites potential delays in securing power for the site, a responsibility that falls to Oracle under the lease agreement. Oracle cannot exit the lease but seeks to postpone payment obligations if the project fails to come online in 2028 as scheduled. Blue Owl holds roughly $3 billion in equity in the development, with Oracle covering debt costs.
During construction, Blue Owl earns a 9 percent yield on its equity, rising to an expected 11 percent levered yield once the center is operational. By invoking force majeure, Oracle extends the period it pays the lower development-stage rent, delaying but not eliminating Blue Owl’s higher lease payments. The campus is part of Oracle’s agreement with OpenAI to deliver AI computing capacity and sits within Stargate, a $500 billion infrastructure initiative involving OpenAI, SoftBank, and Oracle. Project Jupiter has already encountered delays on a planned natural-gas pipeline and legal fights over water and air-quality permits.
Data center developers face growing friction as they race to lock down power, water, and other infrastructure for AI-driven projects. Public opposition has turned data centers into political flashpoints in communities concerned about strain on local resources. William Blair analysts said the notice raises concerns about regulatory and power-related delays across AI deployments but expect minimal near-term revenue impact for Oracle, as Jupiter contributes nothing in fiscal 2027.
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