Oracle’s ‘force majeure’ warning lands as AI power gets scarce

For more than a year, an Oracle Corp. (ORCL) data center outside Salt Lake City ran on natural gas that arrived by truck, according to Bloomberg. Oracle now wants to repeat that move at Project Jupiter, an AI campus in New Mexico built for OpenAI.

The difference is size, and that is where a clever workaround turns into a warning.

Bloomberg reported on Thursday, October 8, 2026, that Oracle is weighing trucked gas so that parts of Jupiter can open before a pipeline arrives. Oracle shares fell about 5.5% that day, according to TipRanks.

Two weeks earlier, Oracle sent a force majeure notice to Jupiter’s developer, a unit of Blue Owl Capital (OWL), Bloomberg reported. The notice formally claims that events beyond Oracle’s control could stall the 2.45-gigawatt campus. The culprit is a gas pipeline.

Land Commissioner Stephanie Garcia Richard denied Energy Transfer (ET) a right-of-way in March and July, citing emissions and water strain, according to Source NM. The line has been rerouted across federal land, Bloomberg Law reported, and its start date slipped to February 1, 2027.

Also read: Google’s nuclear shortcut hands one power stock a record deal

The force majeure notice buys time, not an exit

The notice sounds harsher than its terms. If both sides agree a power-related force majeure event occurred, Oracle could delay rent for three years once payments start, according to Bloomberg. It would still owe full rent over the lease and says it remains “fully committed to New Mexico.”

The sharper exposure sits with the developer’s lenders. About 20 banks provided an $18 billion construction loan that now trades below 90 cents on the dollar, Bloomberg reported.

Lenders have priced in a later opening, even though Oracle told Source NM in July that the project remained on schedule.

Trucks can power a building, not a whole campus

Trucked gas carries a steep premium. Delivered compressed gas costs about four times the main hub price, according to East Daley Analytics figures cited by Bloomberg. That premium eats into what Oracle earns renting out AI chips.

The bigger limit is physical. Powering just 100 megawatts would take a large trailer roughly every 40 minutes, SemiAnalysis estimated in the Bloomberg report. Scaled to Jupiter’s full 2.45 gigawatts, that pace implies close to 900 deliveries a day.

No trucking network is built for that. Certarus, the supplier behind Oracle’s Utah site, has announced data center deals of 60 and 135 megawatts, according to Data Center Dynamics.

Trucks can energize the first building, but the campus still needs its pipeline.

Oracle has reason to pay up. Its fiscal first-quarter results said AI cloud demand is outrunning supply. An empty data hall earns nothing, so expensive gas still beats waiting.

Oracle stock is pricing cash risk, not demand

Oracle built its name on databases, but its stock now trades on AI cloud capacity. Its contracted backlog reached $664 billion in the quarter ended August 31, 2026, according to the same release. That backlog becomes revenue only when data centers switch on.

Building them burns cash. Oracle’s free cash flow was negative $5.4 billion that quarter, the release showed, so every month of delay widens the gap between spending and payback.

The market has punished that gap. Oracle shares are down about 52% over the past year and trade near 16 times forward earnings, according to Stock Analysis. That fits a mature software company, not one whose cloud infrastructure sales jumped 121% last quarter, per the release.

Analysts remain far more upbeat than the share price. Of 43 analysts tracked by Stock Analysis, 35 rate Oracle a Buy or Strong Buy, with an average target near $238. Bank of America sits in that camp with a $240 target, grouping Oracle with other AI chip landlords.

Daniel Ives of Yorkville Ives & Co. started coverage of Hold with a $155 target on October 7, Stock Analysis data shows. Oracle’s investor day later this month, flagged by ERP Today, is the moment to show how much contracted power is actually switched on.

More Oracle:

• Oracle layoffs top 2,500 workers as AI spending surges
• Oracle’s massive AI bet hides a huge warning investors can’t ignore
• Michael Burry just put a date on Big Tech’s AI reckoning, and Oracle’s $664 billion lands in crosshairs

AI’s power bottleneck now runs through permit offices

The AI buildout was first limited by chips, then by grid connections. Oracle answered by building its own power, including a 2.3-gigawatt gas fleet from VoltaGrid, according to Data Center Dynamics. Other builders are buying nuclear upgrades to skip the grid queue entirely.

On-site power trades one bottleneck for another. Jupiter’s Bloom Energy (BE) fuel cells still need gas, Bloomberg noted, and that gas must cross land someone else controls.

The segment New Mexico refused covered just 0.63 miles of state trust land, according to Source NM. That strip helped delay fuel for a project valued at up to $165 billion by nearly six months, according to Bloomberg and Data Center Dynamics.

In the AI race, the scarcest input may now be a signature on a right of way.

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