OFSS shares fall 4% as Oracle triggers 'force majeure' on data centre project over power delays

Oracle Financial Services Software (OFSS) shares dropped 4% on September 25 after its US parent Oracle served a force majeure notice on a Blue Owl unit, the developer of a large data centre in New Mexico, pointing to possible delays in arranging power supply for the project. 

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Force majeure is usually invoked when a company wants relief from contractual obligations because of circumstances outside its control. Such a step tends to unsettle lenders and investors. 

Oracle is not looking to walk away as the anchor tenant. Instead, it is seeking to defer payments in case the facility, known as Project Jupiter, runs into trouble and misses its planned 2028 go-live, according to media reports. 

Blue Owl, which owns data centre developer Stack Infrastructure, has clarified that the notice does not alter the financial commitments to this multi-year project. 

By triggering force majeure, Oracle lengthens the window during which it pays Blue Owl the lower, development-stage rent. 

At 9:45 am on September 25, OFSS shares were quoting 4% lower at ₹10,460 apiece. Oracle's holding in the company is worth ₹70,000 crore. 

The 1,400-acre Project Jupiter campus, which reportedly raised $18 billion in loans from a group of banks, forms part of Oracle's wider arrangement with OpenAI to supply AI computing capacity. 

The campus has reportedly run into several infrastructure hurdles, among them delays to a planned natural-gas pipeline and legal challenges over water and air-quality permits. 

The project sits within Stargate, an initiative to build AI infrastructure in the US under a $500 billion investment commitment involving OpenAI, SoftBank Group and partners including Oracle. 

The large-scale AI infrastructure push has been running into growing difficulties. Developers are competing for power and other resources while dealing with the heavy cost of setting up computing capacity for partners such as OpenAI. 

Public resistance has also turned data centres into a political flashpoint, with communities near such projects voicing concern over pressure on local energy, water and other natural resources. 

Brokerage William Blair views the development as adding to worries over regulatory and power-related delays in AI deployments, but expects only minimal near-term impact on Oracle, given that Jupiter contributes no revenue in fiscal 2027.