Oracle sends force majeure notice on New Mexico Stargate data center

Oracle has sent a force majeure notice to the developer of Project Jupiter, a Stargate data centre campus under construction near Santa Teresa, New Mexico, Bloomberg first reported this week, according to TechCrunch, CNBC and El Paso Matters. The notice went to Stack Infrastructure, the developer, which is owned by the investment firm Blue Owl Capital.

A force majeure clause, common in energy and commodities contracts, excuses a party from its contractual obligations when events outside its control get in the way. According to Bloomberg's sources, cited by TechCrunch, Oracle is not seeking to exit as the campus's main tenant. The notice would instead allow it to delay payments if the facility misses its target of coming online in 2028. Oracle could win a delay of up to three years before it has to pay rent if the parties agree on a force majeure event tied to meeting power commitments, Bloomberg reported, as cited by El Paso Matters.

What Oracle and its partners say

Oracle maintains that it does not expect a delay. Project Jupiter remains on our planned schedule, the company told CNBC, adding that it is fully committed to New Mexico. Force majeure notices are commonplace in developments of this scale and are often used to preserve contractual rights among project partners, Oracle spokesman Michael Egbert told El Paso Matters; they do not, by themselves, establish a delay. Blue Owl Capital told CNBC that the notice does not change the financial commitments to this multi-year project.

Markets reacted anyway. Oracle shares fell more than 3 per cent on Thursday and Blue Owl shares also declined, CNBC reports. Shares of Bloom Energy, which is due to power the facility with its fuel cells, fell 3 per cent; the company said on X that it remains committed to the contract and the planned timeline. Oracle co-chief executive Clay Magouyrk had told analysts on September 10 that Project Jupiter would not affect the company's fiscal 2027 revenue or earnings guidance.

An energy supply that keeps slipping

The notice follows a string of setbacks, most of them tied to energy. The campus is designed to run on an array of Bloom Energy fuel cells able to produce up to 2.45 gigawatts on site, fed with natural gas through a new pipeline, El Paso Matters explains. Two essential parts of that system, the air permit and the pipeline, remain unresolved.

• Pipeline: the roughly 18-mile Green Chile line, built by Transwestern, a subsidiary of Energy Transfer, was expected in service last month and is now planned for February 2027; the New Mexico State Land Office has twice refused to let it cross 0.6 miles of state trust land.
• Federal review: staff at the Federal Energy Regulatory Commission concluded in an environmental assessment that approval would not harm the environment; public comments remain open until October 5.
• Air permit: the New Mexico Environment Department has not issued it; the hearing was held up by lawsuits before the state Supreme Court, which cleared the way last week, and TechCrunch cites a November 23 deadline for a decision.
• County commitments: under tax agreements with Doña Ana County, a first phase was due between October and December this year, with the full campus and power plant by the third quarter of 2028.

These details come from El Paso Matters and TechCrunch. Under the same agreements, the developers are to pay Doña Ana County 12 million dollars a year for 30 years in lieu of taxes; county commissioner Manny Sanchez said Oracle had not notified the county of any change.

Money and politics around a Stargate flagship

Project Jupiter is one of the flagship sites of Stargate, the AI infrastructure initiative that Oracle, OpenAI and SoftBank announced with President Donald Trump early in his second term, TechCrunch recalls. A consortium of almost 20 banks lent Oracle 18 billion dollars for construction, according to Bloomberg as cited by El Paso Matters, and CNBC reports that this debt is already trading at stressed levels according to the Financial Times. S&P Global Ratings downgraded Oracle in early July to its lowest investment-grade rating, El Paso Matters adds, as the company's capital spending climbed to between 90 and 95 billion dollars this fiscal year.

The campus has also become a political flashpoint ahead of the midterm elections, with opposition from residents and environmental groups, and Oracle has launched a public outreach campaign in the state, according to Bloomberg as cited by TechCrunch. Energy Transfer's chief executive Mackie McCrea described opposition to the pipeline as part of broader activism against data centres.

What this changes for companies

For US companies counting on new AI capacity from the Stargate build-out, the episode shows where the real risk lies: not in chips or capital, but in gas pipelines, air permits and local politics. Buyers of cloud and AI compute should ask their providers which sites their capacity depends on and what happens contractually if a campus opens late, because the largest players are now writing that possibility into their own contracts.