AI Summary
5 min readOracle Calls Force Majeure on a $10 Billion Data Center Before Construction Even Begins
Oracle has declared force majeure on the Jupiter data center project in New Mexico — a facility not expected to come online until 2028 and not yet past the design phase. The move stunned the Hidden Gems panel, who had planned a different show until the news broke minutes before recording. "Boy, that escalated quickly," said host Tyler Crow, channeling his inner Ron Burgundy.
Force majeure is a contractual clause that excuses a party from liability when circumstances beyond its control prevent performance. In oil and gas, it typically follows an immediate disaster — a hurricane, a pipeline rupture. Calling it two years ahead of any payment obligation is unusual and, for Crow, "alarming."
The Jupiter project sits at the intersection of several high-profile AI infrastructure bets. The developer is a subsidiary of Blue Owl, a private capital firm — private capital and development have been a shaky combination. The project is one of the big builds backed by OpenAI and SoftBank. And on the energy side, it's the one major project that committed to using fuel cells, which has been part of the Bloom Energy AI infrastructure thesis. The project was announced two years ago and wasn't expected to deliver until 2028. All related stocks are down year to date.
The Thin Ice Thesis
Continue reading the full summary in the app — free to try.
Read Full Summary →Free • No credit card required
Never miss an episode of Motley Fool Hidden Gems Investing
Get every new episode summarized in your inbox — free, ~5 minutes to read.
No spam. Unsubscribe anytime.
What you'll learn
- 1 (00:01) **Oracle Calls Force Majeure on AI Data Center** - Oracle forces the issue by declaring force majeure on a key AI data center project in New Mexico, sparking a debate on the health of the AI infrastructure buildout.
- 2 (07:42) **The Big Takeaway on Oracle's Position** - The panel concludes the episode's first major story by emphasizing that Oracle is not coming from a position of strength.
- 3 (10:07) **Listener Question: Medtronic's Minimet Spin-Off** - The show pivots to a detailed listener question from Zach about evaluating corporate splits and exchange offers, using Medtronic's separation of its diabetes business as a case study.
- 4 (14:34) **General Strategy for Corporate Splits** - The panel broadens the discussion to the general signals and strategy behind a large company divesting a smaller unit.
- 5 (20:53) **Fintech News: Nubank and Revolut Enter the US** - The show covers a major development in fintech: Latin American giant Nubank and European giant Revolut are seeking banking charters to enter the saturated US market.
- 6 (25:56) **Fintech Winners and Losers** - The panel considers which companies benefit from the shifting regulatory and competitive landscape in US fintech.
+ Full timestamped outline available in the app
Guests on this episode
Show Notes
Two years into a four year plan to build a massive data center in New Mexico, Oracle is already claiming force majeure. The company announced it would not be on the hook for payments should the project not meet its deadlines. Lou, Jon, and Tyler break down why Oracle seems so intent on getting ahead of this right now and the implications it may have down the road. Plus, maybe fintech doesn’t have that many barriers to entry after all and a listener question about spinoffs
Have a question? Email us; [email protected]
Tyler Crowe, Lou Whiteman, and Jon Quast discuss:
- Oracle is already preparing for delayed data centers
- Is its commitments to OpenAI a reason behind it?
- Mailbag: How to handle spinoffs
- Latin American and European fintechs are coming to America
- Mailbag: European AI Infrastructure stocks?
Companies discussed: ORCL, OWL, BE, MDT, MMED, GEV, GEHC, SOFI, XYZ, TOST, FOUR
Host: Tyler Crowe
Guests: Lou Whiteman, Jon Quast
Engineer: Dan Boyd
Disclosure: Advertisements are sponsored content and provided for informational purposes only. The Motley Fool and its affiliates (collectively, “TMF”) do not endorse, recommend, or verify the accuracy or completeness of the statements made within advertisements. TMF is not involved in the offer, sale, or solicitation of any securities advertised herein and makes no representations regarding the suitability, or risks associated with any investment opportunity presented. Investors should conduct their own due diligence and consult with legal, tax, and financial advisors before making any investment decisions. TMF assumes no responsibility for any losses or damages arising from this advertisement.
We’re committed to transparency: All personal opinions in advertisements from Fools are their own. The product advertised in this episode was loaned to TMF and was returned after a test period or the product advertised in this episode was purchased by TMF. Advertiser has paid for the sponsorship of this episode.
Learn more about your ad choices. Visit megaphone.fm/adchoices
Learn more about your ad choices. Visit megaphone.fm/adchoices
More from this podcast
Motley Fool Hidden Gems Investing →