Oracle Invokes Force Majeure on New Mexico Data Center But Still Owes Investors Even Without Power
Oracle has invoked force majeure at its Project Jupiter data center campus in Doña Ana County, New Mexico — a move that could defer Oracle’s operational lease payments to developer Stack Infrastructure. It does not relieve Oracle of its obligations to the capital stack that funded the project: Oracle remains on the hook for interest on $18 billion in bank debt and equity returns to Blue Owl Capital for up to three years, regardless of whether the facility ever receives power.
What Blocked Project Jupiter
Project Jupiter was engineered to sidestep New Mexico’s strained utility grid entirely. Stack Infrastructure designed the campus as a self-contained off-grid microgrid, powered by up to 2.45 gigawatts of Bloom Energy solid-oxide fuel cells — eliminating the interconnection queue that has blocked competing AI data center projects elsewhere in the state.
The bottleneck turned out to be fuel, not electricity. The New Mexico State Land Office has repeatedly denied right-of-way permits for the Green Chile natural gas pipeline, a 17-mile Energy Transfer project that would supply the fuel cells. Without the pipeline, the Bloom Energy generation units cannot operate, and the campus cannot come online.
Two Contracts, Two Outcomes
Oracle is the anchor tenant at Project Jupiter, not the developer. Force majeure invoked by a tenant against its developer — citing the pipeline permit denials as a qualifying event — may allow Oracle to pause or defer operational lease payments owed to Stack Infrastructure. It has no bearing on Oracle’s separate financial commitments to lenders.
Investors and bank syndicates hold claims against Oracle that are structured specifically to survive delivery failures. Reports by Bloomberg and the Financial Times confirm that Oracle is contractually required to cover carrying costs — interest payments on the $18 billion project financing and equity returns for Blue Owl’s capital — for up to three years even if the site remains unpowered.
A Design That Backfired
The Project Jupiter structure was intended as a model for how AI data center developers could work around the increasingly congested utility grid. Bloom Energy fuel cells as a generation source looked like a clean path to scale: no interconnection queue, predictable output, and modular deployment.
The pipeline permit problem replaced one risk with another. Natural gas right-of-way approvals require land office cooperation that interconnection queue engineering does not. Oracle now carries the financial exposure of a facility it cannot operate, with no clear resolution timeline on the pipeline permits.