Analysis-Oracle, Blue Owl project delay sends ripples through AI financing, sources say

NEW YORK, Sept 24 (Reuters) - Oracle's move to protect itself ‌against potential delays at a ​massive data center ​project developed by Blue Owl in New Mexico sent a chill through the trillion-dollar market for AI infrastructure financing, according to interviews with bankers and investors.

Oracle issued a force majeure notice in connection with Jupiter, a data center campus Blue Owl unit STACK Infrastructure is building to support OpenAI, ‌the latest setback for a sector where lenders and investors are growing more cautious about financing the industry's breakneck expansion.

Blue Owl said the ⁠notice did not alter the parties' commitment to the project. Even so, the event is reverberating through discussions around other proposed data center financings, including SB Energy, which is developing a campus to serve OpenAI in ‌Ohio, a person close to its financing said. ‌SB Energy decided this week to delay its IPO.

Companies can use force majeure provisions when events beyond their control make it difficult to meet their contractual obligations. Lawyers say such provisions are becoming more common in data center development agreements, raising concerns among lenders and investors.

"The financing side of the AI buildout is ​starting to ask much harder questions than the demand side," said Sean McDevitt, a partner at management consulting firm Arthur D. Little. "The underlying demand still appears very strong, but investors and lenders are increasingly focused on how risk is allocated."

With interest rates in the US rising to levels last seen two decades ago, Wall ⁠Street is intensifying its scrutiny of the economics and the politics of deals that just months ago appeared settled — meaning that the participation in a deal of highly rated firms such as Oracle isn't necessarily enough ​to soothe anxious investors.

The pullback comes as AI-related capital spending by the six biggest US technology companies is projected to reach around $1 trillion in 2027, according to Moody's — raising concerns among lenders about whether markets can absorb the volume of issuance without ​wider pricing pressure or tighter terms.

CASE STUDY

Investors and lenders are studying the Oracle situation as a ‌real-world example of how contractual protections may be tested and who pays the bill when projects run into delays outside the parties' control, they said.

The program is being delayed by a year, said the person familiar with Oracle's notice and the deal. Blue Owl has ⁠about $3 billion of equity invested in the project and earns a lower return during construction, with returns increasing once the data center is completed, the person familiar with the terms said.

Oracle invoked force majeure due to delays securing power to the site, the person familiar with the matter said. Delaying completion pushes back the start of those higher returns for Blue Owl.

As developers race ⁠to build AI infrastructure at unprecedented scale, the contracts underpinning those projects are changing quickly, said Rajat Rana, a New York-based partner at law firm Quinn Emanuel.

“These contracts are so rapidly ​evolving. If you look at a data center contract from January this year and a contract today, it's massively different,” he said.

At least 45 projects worth $68 billion faced opposition from community groups in the second quarter of 2026, according to research firm Data Center Watch, after 75 projects worth about $130 billion were disrupted in the first quarter. Banks are involved in several projects ‌that face community action.

Earlier this year, Blue Owl struggled to syndicate financing for a $4 billion data center project in Lancaster, Pennsylvania, anchored by CoreWeave.

"Blue Owl, STACK Infrastructure and Oracle remain fully aligned on Project Jupiter. This notice does not change the financial ‌commitments to this multiyear project," the company said.

Oracle stock fell 3.5% on Thursday, after media reports of the notice. Blue Owl closed 3.6% lower.

Data center developments including Meta's project in El Paso, ⁠Texas, and Related Digital's planned $16 billion Oracle-focused campus in Saline Township, ‌Michigan, have faced opposition from residents of those areas.

Blackstone's ​QTS in July said it had terminated its planned Digital Gateway data center project in Virginia and withdrawn the associated filings after years of planning and regulatory review.

(Reporting by Echo Wang, Isla Binnie, Sabrina Valle; additional reporting by Milana Vinn, Saeed Azhar; editing by Colin Barr ‌and Stephen Coates)

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