Oracle force majeure notice on Stargate site rattles AI investors

Oracle sent a force majeure notice on Project Jupiter, its 2.45-gigawatt data facility for OpenAI located in New Mexico. This resulted in the share of Oracle to drop by about 4% on Thursday (September 24). The investors were worried not because of actual delays—which Oracle refused to admit—but because of what this notice suggested in terms of a big AI project based on loans, power resources and construction timeliness.

Why Oracle is invoking a clause meant for events beyond its control

The notice was sent to a Blue Owl Capital unit involved in the development of the location in Doña Ana County. Companies can benefit from force majeure clauses that can be executed if any unforeseen incident happens that affects a pre-existing contractual arrangement. Oracle wants to take advantage of such a clause in order to postpone payments as it relates to Project Jupiter if the project does not launch successfully by 2028 as planned.

Under the agreement, Oracle is responsible for securing power and cannot terminate the lease, Reuters reported. Blue Owl, which owns developer Stack Infrastructure, has about $3 billion of equity in the project, while Oracle covers the debt costs.

The campus encompassing 1,400 acres has raised a sum of about $18 billion from banks and also faced difficulties from a delayed pipeline for natural gas and legal challenges concerning air quality and water permits. Blue Owl will receive a 9% return before the construction is completed and expects a return of about 11% if everything goes well in the project. Reuters adds that a protracted development can lead to a deferral of high returns.

The whole AI complex moved on one filing

According to Yahoo Finance, the market crash affected Nvidia, AMD and Micron alongside Oracle. That implies how the investors are closely connecting Oracle’s progress in AI with the companies manufacturing chips.

“Oracle is in the most tenuous of cash positions of all the major hyperscalers,” said KeyBanc analyst Jackson Ader to Yahoo Finance. He noted that Oracle “does feel it more acutely than its larger, more cash-rich peers.” His concern arises from the timing: payments can come due before the power, permits, and construction are ready to turn capacity into revenue.

William Blair was less concerned, telling Yahoo Finance that it expects little near-term impact because Jupiter contributes no revenue in fiscal 2027.

A buildout running on borrowed money and scarce power

It’s important to consider what happens if spending commitments come due before projects are ready to generate revenue, especially as debt plays a growing role in financing the AI buildout. Goldman Sachs Research estimates that nearly $500 billion of AI-related debt has been issued so far in 2026. Credit strategist Amanda Lynam called the wave of AI-related debt unprecedented due to both its size and its multi-year nature.

According to the BIS, if the climate of optimism surrounding AI turns sour, negative implications might be felt by leveraged firms, credit markets and suppliers alike. Meanwhile, PwC forecasts that total global data-center expenditure will reach $31.6 trillion by 2050, with availability of energy determining how much capacity actually gets built and where.

Oracle has found itself at center of those demands. According to Oracle’s latest SEC filing, the company had capex of $28.5 billion in the first quarter of the fiscal year, with remaining performance obligations of $664 billion and reports of $125 billion in senior notes and other long-term borrowings.

It was reported by Cryptopolitan earlier that cloud infrastructure revenue has increased by 121%, plus S&P Global downgraded Oracle’s credit rating in July.

Furthermore, in February, Oracle announced its plans to raise $45 billion to $50 billion this year to expand capacity for its customers, which include OpenAI, Nvidia, AMD, Meta, and xAI. The partnership between Oracle and OpenAI is aimed at an additional 4.5 gigawatts of Stargate capacity, adding to the larger commitment of $500 billion related to the US infrastructure program.

Oracle insists nothing has changed

Oracle has totally rejected claims of setbacks in the project. According to Michael Egbert, Oracle’s Vice President, “Project Jupiter remains on our planned schedule.” Additionally, he said that the company is “fully committed to New Mexico.”

In an X post, Oracle said that notices of force majeure is a common process for projects of this magnitude. It added that notices are put forward to protect the rights under the contract rather than to prove the delay on the project.

In another post, Oracle confirmed that the construction of the campus employs over 3,600 laborers and that the project will generate over $4.7 billion in economic benefits for New Mexico. Blue Owl also indicated that it is not changing its financial commitments for the project.

Don’t just read crypto news. Understand it. Subscribe to our newsletter. It's free.