Oracle raises alarm over AI datacenter
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What is Oracle’s force‑majeure notice on Project Jupiter and why does it matter?
Welcome to Seeking Alpha's Wall Street Lunch, our afternoon update on today's market action, news, and analysis. Good afternoon. Today is Thursday, September 24th, and I'm your host, Kim Kahn. Our top story so far. Oracle has sent a force majeure notice to the developer of a massive data center project in New Mexico to protect itself from potential payments if the facility is delayed, Bloomberg reported. The Project Jupiter site is designed to have 2.45 gigawatts of capacity and is part of the broader Stargate AI infrastructure effort involving Oracle, OpenAI, and SoftBank. The data center is being developed by Stack Infrastructure, a portfolio company of Blue Owl Capital.
How could the U.S. AI infrastructure boom cost $10.3 trillion and affect the economy?
Oracle is the main tenant. Oracle, SoftBank, and Blue Owl are lower, as is Bloom Energy, whose cells were planned for use at the facility. Oracle is seeking to defer payments if the project is delayed and does not come online as planned in 2028. It was not immediately clear whether the notice would release Oracle from its existing financial obligations. New research from the Brookings Institution projected that the AI infrastructure boom could require $10.3 trillion of U.S. investment through 2032. Spending on data centers, power systems, networking, and specialized computing equipment could average about 3.6% of U.S.
Why are treasury yields rising and what does that mean for AI CapEx financing?
GDP annually, the study said. That would make the AI build-out larger than historic U.S. investment booms in railroads, highways, electrification, and telecom. But a growing share of the financial risk is expected to shift away from big tech balance sheets and into less transparent financing structures, making overall exposure harder to assess. Concerns about rising borrowing costs for AI CapEx have contributed to the latest rise in treasury yields. Yields are easing back a little today, but not before the 10-year top 5.15% and the 30-year hit 5.44%, its highest level since 2004. Among active stocks, BlackBerry reported Q2 results above estimates and raised its fiscal 27 revenue and profit outlook, helped by demand for its QNX automotive software.
MGM Resorts is tumbling after Barry Diller's People Inc.
What caused MGM Resorts’ stock tumble and how are oil companies reacting to a diesel export ban?
withdrew its takeover offer. There are lots of ingredients that go into a proposal of this kind on its way to completion, Diller said. We didn't feel the mix was coming together in the way we had hoped and have decided not to pursue taking the company private at this time. And oil stocks are in focus as the oil and gas industry launches a coordinated lobbying campaign to block a potential ban on U.S. diesel exports after President Donald Trump signaled such a proposal, warning that trade restrictions would spike domestic fuel prices. Chevron CEO Mike Wirth, Phillips 66 CEO Mark Lasher, and other senior executives started calling their contacts in the administration to push back on the idea of a ban, according to the Wall Street Journal.
And in other news of note, Meta Platforms unveiled MetaCharm, a handheld AI device, at its Connect event Wednesday. Roughly the size of an AirPod's case, Charm features a 2-inch OLED touchscreen and built-in 5G connectivity.
What is MetaCharm and how might this handheld AI device change consumer tech?
CEO Mark Zuckerberg said, Meta also unveiled a virtual reality headset and a glasses form factor, combining 3D entertainment, immersive sports, and a virtual workspace, with the device set to go on sale in spring for $1299.99. That's all for today's Wall Street Lunch. Look for links for stories in the show notes section. Don't forget, these episodes will be up with transcriptions at SeekingAlpha.com. And for a wealth of coverage on stocks and ETFs, go to SeekingAlpha.com.
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Chapters
5 chapters
1
What is Oracle’s force‑majeure notice on Project Jupiter and why does it matter?
0:02–0:42
2
How could the U.S. AI infrastructure boom cost $10.3 trillion and affect the economy?
0:42–1:16
3
Why are treasury yields rising and what does that mean for AI CapEx financing?
1:16–2:04
4
What caused MGM Resorts’ stock tumble and how are oil companies reacting to a diesel export ban?
2:04–2:56
5
What is MetaCharm and how might this handheld AI device change consumer tech?
2:56–3:35