Oracle Invokes Force Majeure on New Mexico Stargate Data Center Amid Power Delays

Oracle filed a force majeure notice on its 2.45-gigawatt Project Jupiter Stargate campus in New Mexico after gas pipeline and permitting delays, reports say.

Oracle has triggered a force majeure clause on Project Jupiter, its flagship Stargate data center campus in New Mexico, after repeated delays to the gas pipeline and permits the 2.45-gigawatt facility depends on, according to reports from Bloomberg, Reuters and TechCrunch.

Bloomberg first reported the notice Thursday. Force majeure clauses, common in energy and commodities contracts, excuse a party from its contractual obligations when events outside its control get in the way. Oracle is not seeking to exit the project as the campus's main tenant, Bloomberg's sources said. Instead, the notice would allow the company to delay payments should the facility miss its target to come online in 2028. Track the latest AI developments in the data center build-out on AI Buzz Wire as the power crunch reshapes the industry.

A Pipeline Six Months Late

The trouble at Project Jupiter is fundamentally about energy. The campus is designed to handle 2.45 gigawatts and is meant to run on gas-powered fuel cells from Bloom Energy, which makes a reliable gas supply central to its timeline.

That supply is now in doubt:

An Energy Transfer pipeline intended to deliver gas to the site has been delayed nearly six months, to February 1, 2027, after New Mexico regulators repeatedly denied permits for the line, TechCrunch reported.

In August, Bloomberg reported the pipeline's route had been changed following those rejections.

A separate air-quality permit for the fuel cell system that would power the campus is still pending, with the state's environment department facing a November 23 deadline to decide.

Both Companies Say the Project Stays on Track

Oracle publicly projects confidence despite the legal maneuver. "Project Jupiter remains on our planned schedule," the company said in a statement to CNBC. "We are fully committed to New Mexico and confident in our path forward."

Blue Owl Capital, whose unit received the notice as the project's developer, struck a similar tone: "this notice does not change the financial commitments to this multi-year project."

Investors were less sanguine. Oracle stock dropped about 3% on the news, according to CNBC, a modest move that nonetheless signals how sensitive markets have become to cracks in the AI data center build-out.

A Political Flashpoint in New Mexico

Project Jupiter is one of the flagship sites of Stargate, the AI infrastructure initiative Oracle, OpenAI and SoftBank announced with President Donald Trump early in his second term. The campus has drawn sustained opposition from residents and environmental groups concerned about its gas consumption and water use, and it has become a political flashpoint in the state ahead of the midterm elections.

Oracle has responded with a public outreach campaign in New Mexico aimed at winning over the project's critics, according to Bloomberg — an unusually political posture for an infrastructure tenant, and a sign of how contested large-scale AI construction has become.

What Force Majeure Actually Protects

The legal move buys Oracle optionality, not an exit. If the site misses its 2028 online target because of the pipeline delays and permit limbo — events Oracle can argue are outside its control — the company can defer payments tied to the project rather than breach its lease outright. It is a hedge against the single biggest risk in AI infrastructure today: not demand, but power.

Power Is the New Bottleneck

The Oracle notice lands amid growing national scrutiny of AI data center construction. Utilities and grid operators across the country are straining to serve gigawatt-scale campuses, regulators are increasingly reluctant to fast-track gas infrastructure, and local opposition is hardening. The Wall Street Journal described the New Mexico troubles as the first visible "cracks" in Oracle's Stargate build-out.

For an industry that has spent two years announcing trillion-dollar ambitions, Project Jupiter offers a concrete lesson: you cannot schedule a gas pipeline the way you schedule a product launch. The AI race may be won in gigawatts, and gigawatts, increasingly, are the hard part.

What happens next

Three dates now matter for Project Jupiter. The first is November 23, when New Mexico's environment department must rule on the air-quality permit for the Bloom Energy fuel cells that would power the campus. The second is February 1, 2027, the revised in-service date for the Energy Transfer pipeline. The third is 2028, the year the campus is contractually expected to come online — the deadline Oracle's force majeure notice is explicitly designed to protect against missing.

Watch, too, for whether other Stargate sites follow suit. If the playbook works in New Mexico, expect other tenants facing power delays to reach for the same clause — and expect the developers financing those campuses to push back, since a force majeure claim shifts schedule risk squarely onto their balance sheets.

The stakes are hard to overstate. Stargate's economics assume sites come online on schedule at continental scale. Every month of pipeline delay in New Mexico tests that assumption — and sends a signal to every state, regulator and community that has a say in where the next 2.45 gigawatts land.