Oracle (NYSE: ORCL) experienced a stock drop of 6.5% by 10:15 a.m. ET on Thursday as issues arose regarding its proposed “Project Jupiter” data center in New Mexico.
This ambitious $165 billion project is aimed at creating a massive data center in the New Mexican desert. However, the power requirements—2.45 gigawatts—are now in jeopardy.
Oracle’s building an AI house of cards
Let’s rewind a bit: In January 2025, President Donald Trump introduced Project Stargate, a significant effort to enhance AI capabilities in the U.S., led by companies like OpenAI, SoftBank Group, and Oracle. Project Jupiter was intended to be the cornerstone, with Oracle constructing the data center, Bloom Energy (NYSE: BE) providing power through on-site fuel cells, and Energy Transfer LP (NYSE: ET) supplying natural gas to those cells.
The hitch, though, is that Energy Transfer needs to build a 17-mile gas pipeline to bring the gas to the site, and they’re having a tough time securing the necessary environmental permits. The pipeline construction, set to start in August 2026, has already been pushed back to February 2027—and it could be delayed even further.
Due to these delays, Oracle has declared force majeure, which helps it avoid paying the project developer, Blue Owl Capital, for the data center if it’s not finished by 2028.
What this means for Oracle
This situation highlights the risks inherent in the ongoing AI revolution. Oracle’s force majeure declaration stems from complications several steps removed from its direct responsibilities, underscoring how fragile the supply chain can be.
A specific AI company might execute everything perfectly yet still encounter failure due to the missteps of others involved.
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