Oracle's $18 billion loan for the Project Jupiter data center is under pressure as concerns over debt distribution and power infrastructure issues arise. The roughly $18 billion in loans, provided by a consortium of banks late last year, are being quoted at 89 to 91 cents on the dollar. Attempts to distribute the debt to a wider group of investors have stalled due to Oracle's increasing borrowing and weaker credit profile, leaving syndicate banks like Santander and Jefferies holding more project debt than initially planned.
Project Jupiter, a 1,400-acre data center campus in Doña Ana County, New Mexico, is part of Oracle's agreement with OpenAI to supply AI computing capacity. However, the project faces local opposition concerning its potential impact on air quality and water supplies. Additionally, the campus was initially expected to be powered by 2.2 gigawatts of gas turbines, but New Mexico’s state land office has blocked a request to run a natural gas pipeline to the data center.
Oracle's corporate credit rating stands at one notch above junk following a downgrade by S&P in July. Oracle, Santander, and Jefferies did not respond to requests for comment.
