I wouldn’t have been surprised to see “force majeure” in the news this week, assuming the related story had something to do with petroleum and/or products derived from it.
But Thursday’s force majeure headline didn’t have anything to do with oil or diesel or the war(s). Rather, it referred to a notice reportedly sent by Oracle to data center developer Stack Infrastructure, a unit of Blue Owl Capital (remember the Blue Owl drama?).
According to Bloomberg’s account, Oracle indicated that rather than vacating a lease, the company intends to delay rent payments in the event one of the main facilities associated with Donald Trump’s Stargate initiative “get[s] derailed” or otherwise “fail[s] to come online in 2028 as planned.” The linked article cites people familiar with the notice. Shares of Oracle dove on the news.
As nonprofit investigative newsroom Searchlight New Mexico reminds you, the Central Park-sized facility “has spurred protests, lawsuits and fierce pushback over concerns about its environmental impact and transparency,” with at least one case making it all the way to the state’s supreme court.
That’s what Bloomberg’s Sridhar Natarajan, Brody Ford and Paula Seligson meant when they said Thursday that the New Mexico campus is “becoming a symbol of the growing backlash against the broader AI data center boom.” In short, Project Jupiter’s the poster child for one of 2026’s political cause célèbres in America.
Trump’s come down squarely against any sort of curbs on AI development, whether that means halting construction of data centers for environmental concerns or — and I’m chuckling as I write this — slowing down model development in order to ensure rogue AI agents don’t become self-aware and try to kill us all.
Make no mistake: The force majeure notification is news. Most obviously, it speaks to Oracle’s growing concerns that the timeline on the New Mexico project might be too optimistic, but more broadly, it raises uncomfortable questions about hundreds of billions in debt and loans sold and made to finance AI data centers.
Of course, any lease — to say nothing of contracts governing arrangements where the stakes are as high as they are here — is going to include provisions that shield lessees in the event the owner of a property or asset isn’t able to keep up its end of the bargain. That’s not really the story.
Rather, the story is the extent to which, as one law firm put it in a bulletin cited by Bloomberg, “force majeure is no longer a back-end boilerplate provision in AI data center projects, it is a core litigation and risk-allocation tool.” I suppose compute is indeed “the new oil.”
This time last year, Oracle kicked off the borrowing binge that’d see hyper-scalers sell a quarter trillion in new debt over the ensuing 12 months. It’s only fitting if the company’s force majeure declaration likewise starts a trend.
In a brief statement, the company said Thursday the New Mexico site “remains on our planned schedule.”
Slowly at first, and then all of a sudden.
Milhouse, how could you let this happen? You were supposed to be the night watchman.
I was watching. I saw the whole thing. First, it started falling over, then it fell over.
Another lawyer fieldday
Frump is on the wrong side of his base on this one. He’s stuck between a B.S. economy that data center buildouts hold up and what’s best for rural Americans. Not much of a choice in his calculus.
SpaceX should be talking louder about the public benefit of orbital vs terrestrial AI. The hyperscalers should be shifting future capex commitments from terrestrial DCs to SpaceX as an orbital capacity provider, starting now. Given the political insanity around data centers, it’s now crystal clear that orbital AI capacity will come online much faster than terrestrial, at scale, anyway. Just look at ERCOT’s situation in Texas.
It’s not clear to me that there are even two alternative approaches to talk about anymore. Terrestrial never made much sense from the beginning – there was always a political grenade dangling from the dreams. It’ll wind up a niche industry of onsite-power-only deployments.
But is that even financially feasible?
“But is that even financially feasible?” When has that even mattered? Until a few months ago it did not, but maybe it will now.
Yeah, might be at the point if no return.
The value of existing functioning datacenter compute should go up since compute supply growth is being restricted
(in New Mexico and Texas definitely) while demand for compute/token generation is accelerating due to agentic AI.
Does Oracle’s Force Majeure and Blue Owl’s liquidity problems create an incredibly dangerous loop for private markets?
Maybe Agent Orange can kidnap the Hispanic governor of NM (questionable citizenship – she’s 12th generation (New) Mexican), install a puppet, send in ICE & some marines to quell the unrest of those enviro-radical commie troublemakers, and proceed to rename New Mexico to New America as the 51st state…[he might not realize that it’s already the 48th]. Then no need for force majeure.