Oracle seeks force majeure protection on New Mexico data center costs
Oracle is seeking to limit its financial exposure to a large New Mexico data center project as opposition and regulatory delays continue to cloud its timeline. The move focuses on deferring payments if the facility known as Project Jupiter is derailed and does not begin operating in 2028 as planned.
Highlights
- Oracle issued a force majeure notice to Blue Owl Capital’s development unit for Project Jupiter, seeking to postpone payments if the data center misses its 2028 schedule.
- Regulatory delays and local opposition in New Mexico increase cost risks for Oracle, potentially leading to renegotiation of construction milestone and payment terms.
- Blue Owl faces heightened payment uncertainty, as Oracle’s move highlights rising use of force majeure provisions to mitigate financial risk in large data center projects.
Contract strategy around Project Jupiter timeline
Bloomberg reports that Oracle has sent the project’s developer, a unit of Blue Owl Capital, a notice invoking force majeure, according to people familiar with the matter.The company is not attempting to exit the project as the site’s main tenant, the people said. Instead, Oracle is seeking protection against mounting costs by postponing payments if the data center fails to come online on schedule in 2028.
That step adds a new complication to Project Jupiter, a major data center development that is already facing resistance and regulatory setbacks in New Mexico.
Regulatory friction adds cost risk
Oracle’s position highlights the financial risks that can build when large infrastructure projects face prolonged uncertainty over approvals and local opposition. For a primary tenant, delays can translate into higher carrying costs and pressure to renegotiate contractual terms tied to construction milestones and opening dates.For Blue Owl’s development unit, the notice introduces fresh uncertainty around the project’s payment flow if the current timetable slips further. The dispute also underscores how legal protections such as force majeure are becoming a more prominent tool in managing data center project risk as the sector expands into new regions.
Our earlier article on Texas data-center permitting highlighted how political pressure over grid demand and electricity costs led the state to pause key permits pending a grid-operator audit. We noted that the freeze raised uncertainty for developers, increased the risk of delays and disputes over approvals, and could push some projects to consider alternative locations as regulatory risk escalates.
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