Oracle Falls 3.48% After Declaring Force Majeure on Project Jupiter, Its $165 Billion Stargate Data Center
Oracle shares closed at $139.53 (-3.48%) after the company sent a force majeure notice to Blue Owl over delays at Project Jupiter, the New Mexico AI campus tied to Stargate and OpenAI.
Oracle Invokes Force Majeure, and Wall Street Questions AI Spending Again
On Thursday, September 24, Oracle (ORCL) closed at $139.53, down 3.48%. The drop followed news that the company had sent a force majeure notice to a unit of Blue Owl Capital, the developer behind Project Jupiter, an AI data center campus in Doña Ana County, New Mexico. Shares were down around 4% in premarket trading before recovering part of the loss during the session. Blue Owl (OWL) finished the day down 3.6%.
Project Jupiter is one of the flagship sites of Stargate, the AI infrastructure initiative that Oracle, OpenAI and SoftBank announced alongside President Donald Trump. The project could cost up to $165 billion. It covers roughly 1,400 acres, is designed to draw 2.45 gigawatts of power, and is scheduled to come online in 2028.
What the Force Majeure Notice Actually Means
A force majeure clause lets a party to a contract suspend or delay its obligations when events outside its control prevent it from meeting them. According to CNBC and TechCrunch, Oracle is not walking away from the project or trying to end its lease as anchor tenant. Instead, it wants the right to delay payments to Blue Owl if the campus misses its contractual 2028 in-service date.
Both companies tried to calm the market:
- Oracle, in a statement to CNBC: "Project Jupiter remains on our planned schedule. We are fully committed to New Mexico and confident in our path forward."
- Blue Owl, also to CNBC: "This notice does not change the financial commitments to this multi-year project."
Several analysts described the move as defensive legal positioning. In their view, Oracle wants to avoid paying up front for a data center that might sit idle, and the notice does not signal that anything has gone catastrophically wrong.
The Root Cause: a 17.8-Mile Pipeline
The bottleneck isn't chips or funding. It's power. The campus relies on a natural gas-fired fuel cell system, and the Energy Transfer pipeline meant to supply it has run into repeated delays:
- The New Mexico State Land Office twice rejected rights-of-way for the pipeline, citing emissions and strain on resources. Energy Transfer rerouted the 17.8-mile line across federal land.
- The pipeline's in-service date has slipped by nearly six months, to February 1, 2027.
- In August, the New Mexico Supreme Court paused the hearing on the project's air quality permit after a petition from the group New Energy Economy, which argued the hearing was premature while the pipeline still lacked its approvals. On September 1, the court denied the developers' request to partially resume the case.
- The state Environment Department faces a November 23 deadline to rule on the air quality permit.
A Stock That Was Already Under Pressure
Thursday's drop comes after a tough 2026 for Oracle, driven by doubts over how it will pay for its AI cloud buildout:
Balance Sheet and Credit Rating
- Oracle ended fiscal 2026 with nearly $130 billion in borrowings and expects fiscal 2027 capital expenditures of $90 billion to $95 billion.
- On July 9, S&P Global Ratings cut Oracle from BBB to BBB-, one notch above junk. S&P pointed to the enormous cost of the AI infrastructure the company has committed to.
- Oracle issued $5 billion of mandatory convertible preferred stock in February and plans a further equity raise of about $20 billion later this calendar year.
Concentration Risk: OpenAI
About half of Oracle's $638 billion in remaining performance obligations (RPO, the backlog of signed contracts not yet billed) comes from a single customer: OpenAI. Any delay in Stargate infrastructure hits the company's main expected growth engine.
Share Price Trend
Based on figures reported in the financial press, Oracle trades roughly 60% below its 52-week high of more than $340. Its 52-week low is $114.50, which puts Thursday's close about 22% above that floor. In June, CNBC reported that the stock had its worst week since the 2001 dot-com bust.
Market Backdrop: Yields at Their Highest Since 2007
It was a hard day for heavily indebted companies. The 10-year Treasury yield jumped 15 basis points to 5.11%, its highest level since 2007, and the 30-year yield hit its highest level since 2004, above 5.4%. The trigger was S&P Global data showing business activity growing at its fastest pace since July 2021, along with higher oil prices: Brent settled near $107. The odds of another Fed rate hike in October rose to 66%, up from 55% the day before, according to the CME FedWatch tool.
Even so, the major indexes ended nearly flat. The S&P 500 slipped 0.08% and the Dow fell 0.31%, paring losses after Reuters reported that U.S. and Iranian negotiators were working on a plan to reopen the Strait of Hormuz. The flat indexes point to company-specific news as the main driver of Oracle's decline.
Session Snapshot
| Asset | Level | Change |
|---|---|---|
| Oracle (ORCL) | $139.53 | -3.48% |
| Blue Owl (OWL) | — | -3.6% |
| S&P 500 | — | -0.08% |
| Dow Jones | — | -0.31% |
| U.S. 10-year yield | 5.11% | +15 bp (highest since 2007) |
| Brent crude | ~$107 | — |
Sources: CNBC, TechCrunch, Axios, Bloomberg (via Ground News), Yahoo Finance, Forbes, 24/7 Wall St., Benzinga and Quartz for the force majeure notice and the ORCL/OWL moves; Source New Mexico, Searchlight New Mexico and KOB 4 for permits and the pipeline; CNN Business and Seeking Alpha for Treasury yields; TheStreet and Yahoo Finance for index closes. This article does not use Alpha Vantage data: prices come from the financial press cited above.
Key Levels and Dates to Watch
- 52-week low at $114.50: the key support level if worries about AI spending flare up again
- November 23: the deadline for a decision on Project Jupiter's air quality permit, the next major regulatory milestone
- February 1, 2027: the new target date for the Energy Transfer pipeline. Any further slip raises the risk of missing 2028
- Credit rating: at BBB-, one more downgrade would push Oracle into junk territory and raise its borrowing costs
- 10-year yield above 5%: high rates weigh most on heavily indebted companies with long-dated cash commitments
What It Means for Investors
This episode highlights a risk the market has tended to underprice in the AI race: gigawatt-scale data centers depend on physical infrastructure, permits and power, not just chips and capital. A 17.8-mile pipeline can hold up a $165 billion project.
For Oracle, the force majeure notice is sensible contractual protection, and the company insists the timeline is intact. But it arrives while investors are closely watching Oracle's debt load, its reliance on OpenAI and its credit rating. With Treasury yields at nearly two-decade highs, any hint that the backlog will turn into revenue later than expected has a bigger effect on the share price.
Conclusion
Oracle's 3.48% decline to $139.53 does not mean it is stepping back from Stargate. The notice is a defensive move: Oracle wants the option to defer payments if Project Jupiter isn't ready in 2028 because of permitting and pipeline delays. Oracle and Blue Owl both say their commitments are unchanged. Still, the reaction reminded investors of the pressures already weighing on the stock: heavy debt, a credit rating on the edge of junk, and a backlog concentrated in OpenAI. November 23 and February 1, 2027 are the next tests of whether this notice stays a precaution or signals a real delay.