The Power Can Leave Oracle's Data Center. The $18 Billion Cannot.
Bloom Energy's CEO says the fuel cells bound for Oracle's Project Jupiter are "fungible" and can be rerouted after shipping. The roughly 20 banks behind the campus's $18 billion loan, quoted at 89 to 91 cents, can redeploy nothing.
Vincent Jiang · 3 min read
The trucks can turn around
Bloom Energy chief executive KR Sridhar answered Oracle's force majeure notice on Bloomberg TV on 1 October: the fuel cells headed for Project Jupiter are not married to New Mexico. 1 Bloom boxes are "fungible," he said, because "after they're on the trucks, we can redirect the trucks to go to some other location." 1 He reiterated guidance for this year and next and said Bloom "will not be the constraint"; the stock closed at $277.58 on Thursday and is up more than 181 percent this year, while Oracle is down 28.6 percent. 12 The company line is narrower: Bloom says Oracle remains committed to the 2.4 gigawatt contract on Oracle's planned timeline, and declined questions on construction and permitting. 3
The money cannot move
The notice Oracle sent the developer STACK Infrastructure on 24 September draws the line the other way. 4 The lease is hell-or-high-water: it cannot be terminated, and Oracle owes rent whether or not the power arrives; a force majeure event can push back the start of full rent by up to three years, with an automatic extension so the total paid does not fall. 5 About 20 banks lent $18 billion to build the campus; the loans are quoted at 89 to 91 cents, at least one arranger has sold below 90, and the sales imply a paper loss of at least $1.8 billion. 56 Blue Owl's funds put in about $3 billion of equity and earn the equivalent of 9 percent a year until the rent starts. 5
Six dollars of bank debt ride on every dollar of Blue Owl equity
Data
| Value | |
|---|---|
| Construction loans, ~20 banks | $18B |
| Blue Owl equity | $3B |
| Paper loss on the loans, at least | $1.8B |
The filing that disagrees with the press release
Oracle says the campus "remains on our planned schedule," and more than 3,600 construction workers are helping build it. 3 The power plant's own permit filing says otherwise: the April application puts construction start "upon permit issuance" and completion in November 2029, a year past the opening. 3 The state's high court lifted its permitting stay on 17 September, and New Mexico must rule on the fuel cells' air permit by 23 November; pipeline gas has slipped to February 2027. 3 The applicant, Yucca Growth Infrastructure, told a July hearing it stands to lose $325 million a month from November. 3
The flooding changed nobody's script
Force majeure notices are common on projects of this scale and "do not, by themselves, establish a project delay," Oracle says. 3 Then the water arrived: flooding reached the campus this week, and Oracle and STACK, working with partners and insurers, said no critical infrastructure was damaged and the schedule holds. 7
23 November decides
Grant the air permit and the $18 billion has a path back toward par. Deny it and the trucks turn around, leaving the banks holding a campus whose rent has not started. The market started pricing the bet after Oracle reaffirmed the contract on 29 September: RBC kept a $335 target on Bloom and Jefferies raised its own to $264. 8 The fuel cells have wheels. The debt does not.
Deepdive
AI-generated from this story and its cited sources. Not investment advice.
