Key Takeaways:
Oracle's Jupiter AI data center project remains on schedule, the company said, easing investor concerns that a delayed natural gas pipeline would derail the $1.5 billion campus.
Oracle's Jupiter AI data center project remains on schedule, the company said, as its shares pared losses to 3.5% after falling as much as 4.7% on concerns that a delayed natural gas pipeline would derail the $1.5 billion campus in New Mexico.
"Rationally, our deployment should not be a community issue," KR Sridhar, chief executive officer at Bloom Energy, said in an interview, describing its fuel cells as cleaner and quieter than conventional power systems. Bloom is supplying 2.5 gigawatts of fuel cells for the Oracle campus.
The project's schedule had come into question after Energy Transfer's Transwestern Pipeline pushed the in-service date for its Green Chile Project to Feb. 1, 2027, from Aug. 15, according to a regulatory filing. The pipeline is designed to deliver up to 400 million cubic feet of natural gas per day to the site, roughly 0.4 percent of Lower 48 U.S. production. Oracle warned federal regulators in May that "time is of the essence" and that delays could jeopardize the broader project.
The $1.5 billion campus in Doña Ana County, near the U.S.-Mexico border, is among the largest AI infrastructure projects in the country, with Oracle planning to purchase up to 2.8 gigawatts of Bloom's fuel cell systems. The setback illustrates a broader constraint on the AI data center buildout: developers increasingly want dedicated generation rather than waiting years for grid connections, but behind-the-meter power still requires fuel, pipelines and permits.
The pipeline delay stems from New Mexico's State Land Office, which has repeatedly declined to approve Energy Transfer's proposed route across a small section of state-owned land. Oracle initially planned to power the campus with gas turbines from Siemens Energy, but switched to Bloom's fuel cells in April after intense local protests over environmental impacts. The updated design runs everything through a single shared microgrid, with Oracle covering power costs to avoid raising local electricity bills.
Bloom's fuel cells generate electricity through a chemical reaction rather than burning fuel, cutting nitrogen oxide emissions by about 92 percent and using little water because of the cooling design, according to the company. The technology has become a selling point for data center developers facing mounting local opposition, with Dutch-owned cloud provider Nebius Group also swapping plans for gas turbines in favor of Bloom's systems.
The reassurance comes as Oracle's stock has been under pressure, with the shares down 57 percent over the past 10 months and hitting a 52-week low, according to market data. Bloom Energy, by contrast, has gained 170 percent year-to-date, with Barclays raising its price target to $177 from $153 ahead of first-quarter earnings while keeping an Equal Weight rating.
For investors, the Jupiter project's fate matters beyond Oracle. The campus is a test case for whether fuel cells and microgrids can satisfy the power demands of AI infrastructure without straining local grids or drawing years-long utility interconnection queues. Energy Transfer, which began supplying gas this year to an Oracle data center near Abilene, Texas, has signed agreements representing more than 6 billion cubic feet per day of new demand across data centers, utilities and power plants. Oracle shares, trading near a 52-week low, will hinge on whether the company can keep its AI buildout on track as permitting and fuel-supply bottlenecks test the sector's expansion plans.
This article is for informational purposes only and does not constitute investment advice.
