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Oracle triggers 'force majeure' on data center project over power delays: Report

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Oracle triggers 'force majeure' on data center project over power delays: Report

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Oracle triggers 'force majeure' on data center project over power delays: Report

The 1,400-acre Project Jupiter campus, which secured $18 billion in loans from a consortium of banks, according to media reports, is part of Oracle’s broader agreement with OpenAI ​to provide AI computing capacity.

Oracle issued a "force majeure” notice to a Blue Owl unit, the developer of a large New Mexico data center, citing potential delays in securing power for the project, a person familiar with the matter told Reuters on Thursday. Shares of Oracle were down 3.3%. The source said that securing power for the site is Oracle’s responsibility under the contract. Oracle cannot terminate the lease under any circumstances, the source said, adding that alternative asset manager Blue Owl has about $3 billion in equity in the project, with Oracle responsible for paying the debt costs.

Also Read: Oracle tops estimates as AI demand tempers cash-burn fears Companies typically invoke force majeure to free themselves from contractual obligations when problems arise beyond their control, a move that can raise concerns among lenders and investors. Rather than exiting as the main tenant, Oracle is attempting to delay payments should the data center dubbed Project Jupiter get derailed and fail to come online in 2028 as planned, according to a report by Bloomberg News, which first reported the development. Oracle did not immediately respond to a Reuters request for comment. "Project Jupiter remains on our planned schedule,” the company said earlier in the day.


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