Oracle援引不可抗力规避新墨西哥数据中心延期成本

Oracle trying to protect itself from cost tied to a massive New Mexico data center by invoking force majeure. Let's get more insight now from Bloomberg's Wall Street correspondent, Sri Natarajan. And, Sri, I know you've been tracking this data center very closely, given Blue Owl's investment and others. What's gone wrong that they're saying there is a chance we might not make our lease payments? I mean, it's a classic case of the friction between the grand ambitions of all the AI leaders and the AI business economy and local realities.

The project, the data center we're talking about is this massive 1,400 acre campus that's being built in Southern New Mexico, beautiful part of the country right next to White Sands National Park bordering Mexico, but it is also a rural county. And there has been a tremendous amount of local pushback, regulatory challenges, you know, where people are worried about the water consumption, greenhouse emissions, whether there are sufficient financial returns to New Mexico.

Yes. Oracle, Blue and everyone involved with the data center project says, this is a good thing for the state. This will bring a lot of benefits to the local economy. This is important and needed. But what all this challenge and all this friction has meant is it has thrown into uncertainty whether the project can truly go online as previously planned. Which owns the project developer stack infrastructure, and Oracle, which will be the tenant, which will be leasing which will be leasing the compute from this data center facility, believe everything's on track.

So why are we talking about the force majeure notice? The point here is it is purely a defensive shield. It is not Oracle saying that it wants to walk away from the project, that it's tired of all the complaining and the frustration, and it is just going away. But it wants to make sure that it is not racking up expenses. It is not on the hook for certain financial commitments and obligations if there are delays, if there are certain overruns, and if things don't go according to schedule, which as of today, they're still hoping remains the case.

But there is no denying there is a lot of nimbyism when it comes to data centers. Yeah. So let me put you on the spot. I mean, is this the canary in the coal mine? Is this basically something we should expect? We're gonna see navigation around it to your point. It's gonna be more of a legal posturing. Does this change things? Are we now gonna have smaller data centers? Do we have more instead of larger ones? And, obviously, then you have a different kind of marginal cost for compute.

And what are you thinking there? I'll take you up on the canary in the coal mine question because in some ways, this data center project, this campus in New Mexico has become a poster child for all the issues that data centers across the country are facing. You're seeing a lot of price action in the stocks tied to Oracle and the CDS market and certain other related stocks. That doesn't necessarily mean it's all tied to this one project, which has been the project Jupiter.

But investors are trying to analyze what does it truly mean for everything else. Because whether it's Silicon Valley in Northern Virginia or other parts of the country, the data center projects coming up in the battleground states heading into the midterm elections, we have seen problems everywhere. Did we really think maybe a year or two ago that data centers would be the catch line political rhetoric, campaigning rhetoric heading into the elections?

But that's what it's turned into. And that is why when you see if even if this is just a fresh wrinkle in a project that's already been massively controversial, Everyone is trying to tease out what's the next step and what does it mean for every other project because a lot of capital is being allocated into this process, and that's the challenge for the investors. Is this a revolution that will bring in abundance or lead to extinction?

I I'm right there with you, Sherry. The first thing I thought about when I saw this story was the many, many conversations I've had with private capital players. I know you have too saying, we're not making a directional bet on AI. In fact, the only thing we're betting on is the creditworthiness of our tenants. Basically, rental payments for these leases was treated as a sure thing. And I wonder what happens if all of a sudden this throws that into question.

Does the cost of capital get higher? Presumably, bond yields will go higher for these projects, and there'll be less appetite or at least pushback. Does this add another wrinkle in the whole conversation of how fast can we build if all of a sudden our assumptions around the safety of these projects change? You can see certain clues in private markets trading. Right? When this project Jupiter was rolled out, there was an $18,000,000,000 loan that was put forward, a commitment from about 20 banks.

Now there has been some amount of trading in the secondary market tied to those bonds and to those loans, and that's now trading below 90¢ on the dollars. That might not be distressed levels, but it's certainly stress levels. It's not a level where a lender would like to see the trading at. So that tells you that when you see something like this, which in effect is a bit of a spanner in the works, there is going to be concern out there, and that is what is being expressed in the market.

Meanwhile, it is important to point out that Blue Owl has come out and said that this notice does not change the multiyear financial commitment. So it is trying to signal to the market that, you know, the payments that it expects will be coming in as planned.