Oracle on the hook to pay Project Jupiter investors even if the New Mexico site has no power (opens the source in a new tab)
- Oracle has issued a force majeure notice on power supply to the project developer, a unit of Blue Owl Capital, after permitting delays amid rising local opposition, according to people cited by the FT.
- Under the contract, Oracle must still pay a carry cost in lieu of rent for up to three years if the project misses its first-phase deadline.
- Construction is under way on the 1,400-acre campus in Doña Ana County; the FT says Bloomberg first reported the notice.
- $300bn
- Oracle's contract to provide computing power to OpenAI; Jupiter is at its centre
- $18bn
- Construction debt from a consortium of more than 20 banks
- Up to 3 yrs
- Oracle's liability for a "carry cost" in lieu of rent if the site isn't ready
- H1 2027
- Deadline for the first phase to start operating
Why it matters Jupiter is the keystone of Oracle's plan to become an AI data centre player. The fee Oracle must pay would cover debt holders' interest in full plus a certain equity return for Blue Owl funds. The banks — led by BNP Paribas, Goldman Sachs, MUFG and SMBC — saw efforts to offload the debt to a broader group of institutional investors stall amid concerns over Oracle's creditworthiness, and the loans have been quoted at under 90 cents on the dollar. The four-year debt is priced at 2.5 percentage points over SOFR, with an optional two-year extension.
Watch next A second person told the FT there is disagreement over whether force majeure can be triggered before a scheduled completion date. Oracle said the notices do not establish a delay and that Project Jupiter "remains on our planned schedule." A Blue Owl spokesperson said the notice does not change the financial commitments.