Oracle shares fall 6% after data centre force majeure notice

Oracle’s share price fell more than 6% on the New York Stock Exchange after the software company issued a so-called force majeure notice for its large data centre project in New Mexico, known as Project Jupiter. The notice is intended to protect Oracle against higher costs and offers the possibility of deferring payments if the campus is not completed on time. Oracle itself says the project remains on schedule.

In brief:

• Oracle issues a force majeure notice for Project Jupiter in New Mexico
• The share price falls more than 6% on the NYSE to around $135.77
• The project faces regulatory obstacles, local opposition and some $18 billion in debt

Force majeure as protection against cost risks

According to Bloomberg, the force majeure notice is intended to give Oracle legal leeway if the data centre is not operational before 2028. In that case, the company could defer payment obligations without being in breach of contract.

Oracle says it fully supports the project and states that construction is proceeding according to plan. The notice is therefore more of a legal precaution than a signal that the project is in jeopardy, according to the company.

Project Jupiter under pressure from debt and opposition

Project Jupiter is one of the largest data centre projects in the United States and is linked to the Stargate AI initiative. However, the project has been running into problems for some time: there are regulatory obstacles, resistance from the local community and concerns about financing.

The project carries roughly $18 billion in debt. That combination of financial pressure and operational uncertainty appears to have unsettled investors, which explains the sharp fall in the share price. At the time of the decline, Oracle was trading at around $135.77, a loss of $8.78 compared with the previous closing price.