Oracle Invokes Force Majeure in Aim to Protect Itself From Data Center Cost Overruns

Oracle, which is set to lease a New Mexico data center on behalf of OpenAI, sent a notice to the project’s developer asserting its contractual rights to withhold payments if project delays persist, according to Bloomberg.

Oracle sent a notice that cited “force majeure” to a developer owned by Blue Owl Capital called Stack Infrastructure, the newswire reported today. Force majeure is a term in many contracts that can release a party from its contractual obligations in extraordinary or unusual circumstances.

The Information previously reported on delays at Project Jupiter in July after New Mexico state officials denied a permit for a natural-gas pipeline that would have fueled the turbines set to power the proposed 1,400-acre, two-plus gigawatt site. Oracle pivoted to using fuel cells from Bloom Energy, which are less polluting than turbines, but also more expensive. Analysts previously estimated that the new set up would cost about $8 billion, likely billions more than the original cost. OpenAI is set to use the facility when it is completed.

“Project Jupiter remains on our planned schedule. We are fully committed to New Mexico and confident in our path forward,” Oracle posted to its account on X, formerly Twitter, this morning. The stock prices for both Oracle and Blue Owl tumbled more than 5% in early stock market trading.