Doña Ana County, New Mexico – The $18 billion loan package that finances Oracle’s sprawling Project Jupiter data‑center is under strain, with syndicate banks quoting prices of 89 to 91 cents on the dollar, according to the Financial Times.
Project Jupiter and its financing
Project Jupiter, a 1,400‑acre campus leased by Oracle, is a cornerstone of the company’s agreement with OpenAI to deliver AI computing capacity. The venture secured a massive loan consortium late last year to jump‑start construction, but the debt now appears less attractive to investors.
Efforts to broaden the investor base have stalled, as the Financial Times reports, amid worries about Oracle’s rising borrowing and a weakening credit profile. Oracle’s corporate credit rating sits just one notch above junk after S&P downgraded the company in July.
Bank exposure and balance‑sheet impact
Because the loans are tied directly to the New Mexico data‑center, banks are now forced to hold more Oracle‑linked project debt on their balance sheets than originally planned. Santander and Jefferies, among the lenders, have not responded to Reuters requests for comment.
The discounting of the debt reflects a broader market caution toward high‑growth tech firms that are expanding aggressively into AI infrastructure while carrying substantial leverage.
Oracle’s broader AI push
The New Mexico campus is part of the “Stargate” initiative, a $500 billion national effort to build AI infrastructure led by OpenAI, SoftBank Group and Oracle. Oracle projects up to $95 billion in capital expenditures for fiscal 2027, expecting to recoup up to $25 billion from customer repayments.
While the company’s ambition to dominate AI compute resources remains clear, the financing challenges underscore the importance of prudent debt management, especially as investors scrutinize credit quality.
Local implications
For Doña Ana County, the project promises jobs and economic activity, but the financing hiccup raises questions about the timeline for construction and the certainty of future tax revenues. Local officials have not yet issued a statement.
Stakeholders in the region will be watching closely as Oracle works to stabilize its financing and continue building the data‑center that could become a key hub for AI services across the Southwest.
Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.
