Oracle Shares Slide on Force Majeure Notice for New Mexico Data Center
Oracle's stock fell about 5% after reports that it sent a force majeure notice to the developer of Project Jupiter, a large AI data center in New Mexico. The company seeks to delay payments if the facility misses its planned 2028 opening, though it insists the project remains on schedule. The news underscores Oracle's heavy capital spending, including $28.5 billion in the quarter ended August 31.
Project Jupiter, designed to support 2.45 gigawatts of power, forms part of the broader Stargate AI infrastructure initiative involving Oracle, OpenAI, and SoftBank. The New Mexico site has encountered local resistance and regulatory hurdles, including denial of a key permit. Oracle's capital expenditures reached $28.5 billion in the quarter ending August 31, a sharp rise from $8.5 billion the prior year, while free cash flow stood at negative $5.4 billion.
The company plans to raise roughly $40 billion through debt and equity this fiscal year to fund expansion. Revenue grew to $19.3 billion from $14.9 billion year-over-year, with cloud infrastructure growth of 121%. Oracle booked over $30 billion in new AI contracts during the quarter and reported $664 billion in remaining performance obligations, reflecting substantial contracted future business.
This development could signal growing investor sensitivity to execution risks in large-scale AI infrastructure projects. Shareholders, energy suppliers like Bloom Energy, and local communities in New Mexico may all feel ripple effects if construction timelines slip. The episode may also prompt broader market scrutiny of how tech companies manage contractual protections while maintaining confidence in ambitious buildout schedules, potentially influencing how similar projects are financed and communicated going forward.