Oracle's Stargate Project Faces Land Disputes and Delays

Oracle's massive data center project in southern New Mexico, a crucial component of the Stargate AI initiative, is facing significant challenges that threaten its completion. The project, known as Project Jupiter, is a 1,400-acre hyperscale data center campus designed to deliver up to 2.45 gigawatts of power capacity.

The construction debt for the project is already trading at 89 to 91 cents on the dollar, indicating that lenders are pricing in a meaningful probability that something goes sideways. Oracle issued a force majeure notice in late September, citing power-related delays as the primary culprit.

The natural gas pipeline permitting timeline has slipped to February 2027 at the earliest, pushing the project's 2028 operational target into uncomfortable territory. Local environmental groups have raised objections about emissions from the facility, and Oracle has attempted to defuse the issue by pivoting its power strategy to use Bloom Energy fuel cells instead of natural gas turbines.

This is not Oracle's only Stargate headache, as another location in Saline Township, Michigan, has faced lawsuits over zoning disputes and environmental concerns that have delayed development.