Oracle, Blue Owl project delay sends ripples through AI financing

A delay in a massive data center project developed by Blue Owl in New Mexico has sent shockwaves through the $1 trillion AI infrastructure financing market, according to industry insiders. Oracle, a major player in the sector, issued a force majeure notice in connection with the Jupiter data center campus, which is being built by Blue Owl's STACK Infrastructure to support OpenAI.

While Blue Owl maintains that the notice does not alter their commitment to the project, the event has ripple effects throughout the industry. Other proposed data center financings, such as SB Energy's campus in Ohio, have also been impacted, leading to delays in their IPO plans. The use of force majeure provisions in data center development agreements is becoming more common, raising concerns among lenders and investors about how risk is allocated.

With interest rates rising and Wall Street scrutinizing the economics and politics of AI deals, the financing side of the industry is facing increased pressure. The project delay comes as AI-related capital spending by the six biggest US technology companies is projected to reach $1 trillion by 2027, raising concerns about market absorption capacity.