Oracle Seeks Payment Delays for $165 Billion Data Center Project

Oracle has notified Blue Owl Capital's development unit of its intent to delay payments on its massive $165 billion data center project in New Mexico, according to reports. The company issued a force majeure notice that allows for payment deferrals if the "Project Jupiter" site misses its 2028 opening deadline.

The project has encountered permitting challenges, including an initial rejection and subsequent denial of reconsideration for state land access required for its natural gas pipeline. Loans associated with the project, totaling approximately $18 billion, are reportedly trading at stressed levels, according to the Financial Times.

Despite the notice, Blue Owl stated that it does not alter its financial commitments to the project. Oracle's stock fell more than 3 percent following the news. The company's shares have declined nearly 60 percent from their peak approximately one year ago.

Oracle's financial performance has drawn scrutiny, with the company reporting negative free cash flow for five consecutive quarters. Over this period, it has burned through $29.1 billion as spending on data centers has outpaced the cash generated by its business. Last quarter, revenue was $19.3 billion, but capital expenditures reached $28.5 billion, exceeding operating cash flow of $23.1 billion.