Oracle’s force majeure notice puts the AI buildout’s financing chain on display

Oracle sent a force majeure notice on its New Mexico Stargate data centre¹. The notice went to Blue Owl following a series of setbacks at the Project Jupiter campus, a 2.5GW site in New Mexico set to come online in 2028². The notice would allow Oracle to delay payments should the facility miss that 2028 target to come online¹.

The cause is permitting rather than construction. Officials where the facility is being built have delayed the permits necessary to power the project, and Oracle may seek to delay lease payments as a result⁴. Under the terms of the contract, however, Oracle remains liable to pay data centre investors even if the site has no electricity³. Oracle stock slid after the notice was issued⁵.

Why it matters to investors

The episode shows where the risk in AI infrastructure actually sits. The force majeure notice on a US data centre showcases AI infrastructure risks⁴, because the financing rests on lease obligations that assume a site comes online on schedule^1,3. When the schedule slips for reasons outside the builder’s control, the contract does not necessarily move with it³.

Lenders are exposed alongside developers. Blue Owl led a $2.4 billion AI factory financing for IREN weeks before this notice, and private credit defaults have hit a record 6.3%⁶. Credit markets have already marked the concern: Oracle credit default swaps hit a record high as AI debt worries mount⁷. Separately, Larry Ellison is set to sell up to $7.5bn worth of Oracle stock³, and his net worth is estimated at $182.1 billion⁵.

What to watch

The permits are the gating item. Power approvals at the site have been delayed by local officials⁴, so the 2028 online date and whether it holds will determine if the notice is a negotiating position or the start of a payment dispute^1,2.

The contract language is the second item, because it decides who absorbs the delay. Oracle is on the hook to pay data centre investors even without electricity on site³, which means the notice and the obligation point in opposite directions. Credit spreads are the third: Oracle’s default swaps are at a record⁷ and private credit default rates are at a record⁶, so any further setbacks at Jupiter will be read through those two prices rather than through Oracle’s equity alone⁵.