Oracle Invokes Force Majeure on Its Massive New Mexico AI Data Center

A Legal Shield for a $165 Billion Bet

Oracle has issued a force majeure notice to Stack Infrastructure and BorderPlex Digital Assets, the developers of New Mexico's Project Jupiter, seeking to defer payment obligations if the hyperscale AI data center fails to come online by its 2028 target. The move rattled markets on Thursday, September 24. Oracle shares fell more than 3% following news that the company sent the notice tied to its New Mexico data center project to protect itself from higher expenses. Bloom Energy, the campus's power supplier, also took a hit.

Force majeure clauses, common in energy and commodities contracts, excuse a party from contractual obligations when events outside its control get in the way. Oracle is not seeking to exit as the campus's main tenant — instead, the notice would allow the company to delay payments should the facility miss its 2028 target to come online. The dispute centers not on whether the project will proceed, but on when its more expensive lease phase will begin.

A Pipeline Problem at the Heart of It All

Designed to handle a staggering 2.45 gigawatts of power — enough to supply roughly 1.8 million homes — Project Jupiter represents the extreme scale required by modern AI workloads. 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, larger than New York's Central Park, would train AI models and ultimately provide compute capacity for OpenAI.

Oracle partnered with Bloom Energy to power the campus using solid oxide fuel cells. Because these cells generate electricity electrochemically, they require minimal water — a crucial advantage for operating a massive data center in New Mexico's arid climate. Despite solving the water issue, however, Bloom's fuel cells still require a steady supply of natural gas to operate. That's where things have gone sideways. The natural gas pipeline supplying fuel to the facility was originally slated to cross state trust land, but the state land commissioner rejected right-of-way applications twice — in March and July 2026 — delaying the construction schedule by nearly six months. The 17-mile pipeline extension, dubbed the Green Chile Project, was expected to deliver up to 400 million cubic feet of natural gas per day to power 2.5GW of Bloom fuel cells deployed on site.

Water, Opposition, and a Reservoir Near Empty

State officials cited large-scale water use, increased CO2 emissions, and a lack of state revenue generation as major factors in their decision to block the pipeline routes. The water concern is especially acute. The story notes that the state's largest reservoir sits at roughly 1.4% capacity — its lowest since 1971 — and data centers can require millions of gallons daily to prevent overheating. Oracle counters that its closed-loop cooling system will limit 15-year net water consumption to the equivalent of just nine average U.S. households.

The campus has drawn opposition from residents and environmental groups and has become a political flashpoint ahead of the midterm elections. Oracle has responded with a public outreach campaign in the state aimed at winning over the project's critics. Before Project Jupiter was revealed in full, the developers worked with local officials on an incentive plan and a strategy for how to roll out information to the public. Locals only learned the venture was tied to Oracle and OpenAI after it was approved. That disclosure gap has fueled much of the community backlash.

Progress on the Ground, Uncertainty in the Markets

Oracle's AI data center campus in Doña Ana County is now 26% complete, up from 17% in July, according to Mahesh Thiagarajan, the company's executive vice president of cloud infrastructure. While the overall campus has moved forward, the fuel-cell microgrid that will power it is only about 10% complete, highlighting a gap between site construction and the energy system rollout. Developers have been reshaping the landscape at a breakneck pace, employing around 3,500 workers on site.

As of mid-September 2026, roughly $18 billion in loans tied to the Oracle-leased data center were trading at 89–91 cents on the dollar. The discounted debt reflects concerns surrounding permitting delays, local opposition, and the scale of Oracle's broader AI infrastructure buildout. Oracle insists the project remains on schedule, with a spokesperson stating, "Project Jupiter remains on our planned schedule. We are fully committed to New Mexico and confident in our path forward." But the force majeure notice tells a more cautious story — one that raises a broader question for the entire AI infrastructure boom: when the regulatory and environmental realities of building at this scale collide with the urgency of the AI race, who ultimately bears the cost of delay?