Oracle Corp. has issued a notice of force majeure to the developer of a massive New Mexico data center, seeking to shield itself from potential costs if the project fails to meet its planned 2028 launch date.

The move marks a dramatic new friction point for Project Jupiter, a flagship development under the $400 billion Stargate artificial intelligence (AI) project announced by President Donald Trump alongside executives from Oracle, OpenAI, and SoftBank Group Corp.

Designed to generate 2.45 gigawatts of power — enough to supply nearly 1.8 million homes — the southern New Mexico campus has become a central battleground in the national debate over the rapid expansion of AI infrastructure.

According to a Bloomberg report, Oracle delivered the legal notice to developer Stack Infrastructure, a unit of Blue Owl Capital Inc. While Oracle is not currently attempting to abandon its role as primary tenant, the company is positioning itself to defer payments if ongoing regulatory and construction hurdles delay completion.

The strategy aims to limit financial exposure as local opposition intensifies ahead of the upcoming U.S. midterm elections, turning the project into a high-stakes political flashpoint. Shares of Oracle and Blue Owl both dropped roughly 4% following initial reports of the legal maneuvering.

Despite the force majeure filing, Oracle maintains a public stance of stability.

“Project Jupiter remains on our planned schedule,” an Oracle spokesperson said in a statement. “We are fully committed to New Mexico and confident in our path forward.”

Blue Owl Capital pushed back on suggestions that its financing structure is in jeopardy. “This notice does not change the financial commitments to this multi-year project,” the firm stated, though representative notes indicated the underlying debt tied to the $18 billion syndicated bank loan is already trading at stressed levels below 90 cents on the dollar.

The campus faces severe supply chain and environmental bottlenecks.

A crucial natural gas pipeline, developed by Energy Transfer LP to feed the facility’s Bloom Energy fuel cells, was recently delayed by six months to February 2027 following repeated route permit denials by the New Mexico State Land Office. Public backlash has also grown over early local approval processes that kept Oracle and OpenAI’s involvement undisclosed until after key local incentives were secured.

Legal experts note that force majeure clauses, historically used in commodities markets to manage extreme disruptions like natural disasters, are rapidly transforming into core risk-management mechanisms for high-demand AI infrastructure. Contracts across the tech sector increasingly feature tight performance deadlines, allowing mega-cap clients to delay funding or terminate leases if developers fail to deliver power and capacity on time.

During a recent earnings call, Oracle leadership sought to reassure Wall Street, emphasizing that Project Jupiter’s current trajectory will not alter the company’s fiscal 2027 revenue or earnings guidance. Nevertheless, as lenders watch the stressed debt markets, the friction highlights the growing financial risks embedded in the global race to build massive AI compute power.