Oracle shares drop on report of 'force majeure' notice for data center project

Oracle Corporation shares declined approximately 4% on Thursday after Bloomberg reported that the company issued a "force majeure" notice related to its data center project in New Mexico.

The notice, citing sources familiar with the matter, reportedly aims to shield Oracle from higher expenses and potentially delay payments if the facility, known as Project Jupiter, does not become operational as scheduled in 2028. The notice was sent to developer Blue Owl Capital.

While the specific reasons for the notice were not detailed, it suggests potential challenges with the project's timeline or budget. A "force majeure" clause in contracts typically allows parties to be excused from performance obligations due to unforeseen events beyond their control, such as natural disasters or governmental actions.

Oracle has been heavily investing in expanding its data center capacity to support the growth of its cloud services. The New Mexico project is part of this strategy to meet increasing demand from its enterprise clients.