LAS CRUCES — AI giant Oracle is seeking to free itself from liability if setbacks emerge and delay the timeline for its controversial Project Jupiter — the massive Santa Teresa development that is intended to host artificial intelligence infrastructure for companies like Oracle and OpenAI.
The data center has spurred protests, lawsuits and fierce pushback over concerns about its environmental impacts and transparency.
Bloomberg News reported Thursday that Oracle sent a legal document called a “force majeure” notice to the project’s main developer.
Such a notice declares that an uncontrollable event is preventing performance of obligations under a contract.
The notice went to Blue Owl Capital Inc., which owns STACK Infrastructure, the company developing Project Jupiter in partnership with BorderPlex Digital Assets and with major investments from Oracle and OpenAI. With this notice, Oracle is trying to put off payments if the data center does not come online in 2028 as planned, people familiar with the situation told Bloomberg News.
“Blue Owl, STACK Infrastructure and Oracle remain fully aligned on Project Jupiter. This notice does not change the financial commitments to this multiyear project,” Nikki Wheeler, a spokesperson for STACK Infrastructure, wrote in an email Thursday to The New Mexican.
Oracle shares fell almost 5% early Thursday, closing at a decline of 3.47%, while Blue Owl Capital Inc.’s shares dropped 3.6%. This comes as Oracle’s $18 billion in loans tied to the data center are being quoted at just 89 to 91 cents on the dollar, according to the Financial Times.
“This is no longer just New Mexicans saying Project Jupiter is extraordinarily risky. Wall Street is saying it with money, and Oracle is saying it in its contracts,” said Mariel Nanasi, executive director of Santa Fe-based New Energy Economy. “
When $18 billion in project loans cannot readily be sold at face value, when the debt is being quoted at 89 to 91 cents on the dollar, and when Oracle itself reportedly invokes force-majeure protections against delay, New Mexico’s elected officials and candidates should pay very close attention.”
Oracle said Project Jupiter remains on schedule.
“We are fully committed to New Mexico and confident in our path forward,” Michael Egbert, Oracle’s vice president, wrote in an email Thursday to The New Mexican. “Force-majeure notices are commonplace in developments of this scale and are often used to preserve contractual rights among project partners. They do not, by themselves, establish a project delay or change delivery expectations.”
Oracle’s use of the force majeure provision has drawn criticism from environmental advocates.
The notice is typically invoked to free a party from obligations in extraordinary instances known as “acts of God,” like fires, floods or war, according to the Legal Information Institute at Cornell Law School.
“I question whether that claim is actually applicable and real in this situation,” Nanasi said. “It’s got to be unforeseeable … and this is completely foreseeable.”
Project Jupiter has faced a series of regulatory hurdles. Most recently, the New Mexico Supreme Court paused its state air quality and water use permitting proceedings before allowing them to continue in a Sept. 17 decision.
“New Mexico has already given over 200 million gallons of our fresh water to construct something that is not only terrible for our environment but also appears to be on shaky grounds financially,” Colin Cox, an attorney at the Center for Biological Diversity said in a statement to The New Mexican on Thursday. “The state should turn off the pump. There is no emergency to start building something that may never be finished.”
Project Jupiter is confronting another delay: A gas pipeline that would power the data center was set to begin service this month, but it has yet to be authorized by the New Mexico State Land Office.
“Our clients and community members opposed this from the start — understanding quite well that Project Jupiter will provide more harm to the community than good,” Maslyn Locke, a senior staff attorney at the New Mexico Environmental Law Center, wrote in an email to The New Mexican on Thursday. “Oracle’s debts should not be excused based on the fact that they underestimated community power and opposition to their ill-advised project.”
