Oracle's Force Majeure Notice: What It Means for Project Jupiter

By Jaspal Singh September 25, 2026 Updated: September 25, 2026

Oracle's force majeure notice on Project Jupiter doesn't cancel the New Mexico AI campus. It is a contractual move that could let Oracle delay rent to its developer by up to three years if the natural gas meant to power the site arrives late. The real problem underneath is power: blocked pipeline permits and an air permit that still hasn't been issued.

What Happened

On 24 September 2026, Bloomberg reported that Oracle had sent a force majeure notice to Stack Infrastructure. Stack is the Blue Owl Capital-owned developer building Project Jupiter, a data center campus of about 1,400 acres in Doña Ana County near Santa Teresa, close to the US-Mexico border. The campus is part of the Stargate program to build computing capacity for OpenAI. According to El Paso Matters' report on the notice, if both parties agree that a force majeure event tied to meeting power commitments has occurred, Oracle could put off rent payments for up to three years.

Oracle is not trying to leave the project. Spokesman Michael Egbert told reporters that "force-majeure notices are commonplace in developments of this scale and are often used to preserve contractual rights among project partners," and that they "do not, by themselves, establish a project delay or change delivery expectations." The company says the project remains on schedule. The Albuquerque Journal reported that more than 3,600 construction workers are on site.

Investors were less calm. Oracle shares fell more than 3% to $139.54 on 24 September, according to the Albuquerque Journal. That is more than $100 below the stock's 2026 peak of about $248 in early June.

The notice follows months of setbacks on the project's power supply. The New Mexico State Land Office rejected Energy Transfer's request to run 0.6 miles of a 17-mile gas pipeline across state trust land in March. It rejected the company's request to reconsider on 14 July. Transwestern Pipeline, an Energy Transfer subsidiary, has since moved the in-service date of its Green Chile pipeline from September to February, El Paso Matters reports.

Why It Matters

Project Jupiter is enormous. Doña Ana County commissioners approved up to $165 billion in industrial revenue bonds for it on 19 September 2025, by a 4-1 vote, according to Searchlight New Mexico's project timeline. That is the largest private investment ever proposed in the state. Its planned power plant is 2.45 gigawatts of Bloom Energy fuel cells running on natural gas, roughly the output of two large nuclear reactors, and all of it would serve a single campus.

A rent deferral moves risk from the tenant to the landlord. Stack and its owner Blue Owl are paying to build the campus now and expect Oracle's lease payments to cover that cost once the buildings are delivered. If Oracle can suspend those payments for three years, the developer carries that financing cost without the revenue. The pressure then reaches whoever lent against the lease.

The deadlines are close. El Paso Matters reports that the tax-break agreements required the first phase of Project Jupiter to come online between October and December 2026, with the full campus and power plant finished by the third quarter of 2028. The same agreements pay Doña Ana County $12 million a year for 30 years. A power shortfall this year would therefore affect the county's incentive deal as well as the private lease.

The effect also extends past New Mexico. Oracle is one of OpenAI's largest compute providers, and Stargate's backers have borrowed heavily on the assumption that capacity will arrive on time. Earlier this year we covered how Stargate delays hit SoftBank's share price. Project Jupiter is the clearest example yet of the same pressure reaching an individual site.

How It Works

Force majeure is a contract clause. The phrase means "superior force." It describes events outside either party's control that stop someone from meeting an obligation, such as natural disasters, wars, or government action. A typical clause does three things. It lists or defines the qualifying events. It requires prompt written notice when one occurs. It explains what follows, usually a suspension or extension of obligations rather than an end to the contract.

Notice is how the right is protected. Most clauses only work if notice is given within a set period after the affected party learns of the event. That explains why Oracle's spokesman described the letter as preserving rights. Missing the notice window can mean losing the protection, even when the event would otherwise have qualified. Many companies therefore file notices early, sometimes before it is clear there will be any delay.

Government action is a common trigger. Here, the likely argument is that a state agency's refusal to grant a pipeline right-of-way, which Oracle did not control, is holding back the power the campus needs. Whether that holds up depends on wording neither company has published. Courts usually ask whether the event was listed or clearly covered, whether it actually caused the failure to perform, whether it was foreseeable when the contract was signed, and whether the party tried to work around it.

Why a pipeline can stop a data center. Most data centers take power from the electric grid. Project Jupiter was designed to generate its own power on site, sometimes called "behind the meter," using fuel cells. That design avoids waiting years for a utility interconnection, but the campus then depends on a steady gas supply. The chain runs in order. The pipeline needs rights-of-way. The fuel cells need gas from the pipeline and an air quality permit to operate. The servers need the fuel cells. Oracle's rent is linked to the delivery of working capacity. A missing 0.6-mile segment near the start of that chain can hold up everything after it.

The air permit is a second bottleneck. The Land Commissioner's July denial cited high greenhouse gas emissions and strain on water. Searchlight's timeline shows the developers' first design, based on gas turbines, was estimated at 14 million tons of CO2-equivalent a year. The fuel-cell plan announced on 27 April 2026 lowered that estimate to 10.1 million tons. The New Mexico Environment Department has not issued the air permit. The state Supreme Court paused permitting proceedings in August and lifted the stay on 17 September. The regulatory process is now moving again, but without an approved permit, even a finished pipeline cannot legally power the plant.

Oracle has placed a large bet on this approach. In April it expanded its Bloom Energy agreement to 2.8 GW of fuel cells, and Project Jupiter's 2.45 GW accounts for most of that total.

What's Still Unknown

The contract language. Neither the lease nor the notice is public. We don't know how the lease defines force majeure, when the notice window started, or whether a regulator's refusal counts under the clause. The three-year deferral figure comes from Bloomberg's sources, not a published document.

Whether Blue Owl agrees. According to Bloomberg's reporting, the deferral depends on both parties recognizing a force majeure event. Stack could dispute it, especially since the first pipeline denial came in March. That raises the question of whether the risk was foreseeable before later milestones.

The federal reroute. Energy Transfer has reportedly moved the pipeline route onto federal land to avoid the state parcels, and a new in-service date of February 2027 has been reported. Whether that route receives all its approvals on time has not been confirmed.

The air permit outcome. Proceedings have restarted, but no hearing result exists yet. A denial, or approval with strict conditions, would change the project's power calculations again.

The phase-one deadline. It is unclear what happens under the county's incentive agreements if the first phase misses the October-December 2026 window, and whether the county can or would enforce that.

OpenAI's plans. Neither OpenAI nor Oracle has said whether capacity planned for New Mexico could move to other Stargate sites if Jupiter is delayed.

Frequently Asked Questions

What is a force majeure notice?

A force majeure notice is a formal letter one party sends under a contract to say that an event outside its control is affecting, or may affect, its ability to perform. Sending it usually preserves the right to later suspend or delay obligations without being in breach. The notice alone does not prove a delay has happened or that the other party accepts the claim.

Is Oracle pulling out of Project Jupiter?

No. Based on Oracle's statements and the reporting so far, the company wants the option to delay rent payments if power arrives late, not to exit the lease. Oracle says the project is on schedule and that it remains fully committed to New Mexico. Construction is continuing, with more than 3,600 workers reported on site in September 2026.

Why does a gas pipeline matter to an AI data center?

Project Jupiter is designed to generate its own power on site with 2.45 GW of Bloom Energy fuel cells instead of drawing mainly from the grid. Those fuel cells run on natural gas, so they need a pipeline. Without an approved route and delivered gas, the plant cannot run and the servers cannot switch on, whatever state the buildings are in.

Why did New Mexico reject the pipeline?

Land Commissioner Stephanie Garcia Richard denied Energy Transfer's request to cross 0.6 miles of state trust land in March 2026 and rejected reconsideration on 14 July. She cited the project's high greenhouse gas emissions, the expected strain on water and other natural resources, and minimal benefit to the trust's beneficiaries and to New Mexico.

How much could Oracle defer?

The dollar amount hasn't been disclosed. Bloomberg's sources say Oracle could delay rent for up to three years if both it and developer Stack Infrastructure agree that a force majeure event linked to power commitments has occurred. Because the lease is private, neither the monthly rent nor the total deferred amount is publicly known.

Who is building Project Jupiter?

Stack Infrastructure, a data center developer owned by Blue Owl Capital, is building the campus, and Oracle is the anchor tenant. OpenAI is the expected end user through the Stargate program. BorderPlex Digital Assets, formed in 2024, originated the local project, and Doña Ana County approved up to $165 billion in industrial revenue bonds for it in September 2025.

What happens to Oracle's stock and to AI infrastructure spending?

Oracle shares fell more than 3% to $139.54 on the day of the report and remain well below June's peak of about $248. The broader worry is that power, not chips, is becoming the main limit on AI build-outs. When power arrives late, lease payments slip and so do the loans that depend on them.