Oracle's $165 billion Project Jupiter faces cost overruns and a two-year delay

Oracle’s roughly $165 billion Project Jupiter campus in Dona Ana County, New Mexico, has reportedly run into multibillion-dollar cost overruns and a two-year delay after a forced switch to fuel cells.

Oracle confirmed the power overhaul on July 1, 2026, moving to up to 2.45 gigawatts of Bloom Energy solid-oxide fuel cells after New Mexico regulators denied gas-pipeline and air permits for the original gas-turbine design. Oracle said the change cuts projected nitrogen-oxide emissions by roughly 92%.

The pivot came at a price. Fuel cells cost more than the turbines Oracle had planned, and the site still lacks an approved air permit. Research firm SemiAnalysis has pushed its base-case estimate for first power at the campus from 2027 to 2029, about a two-year slip. New Mexico regulators separately rejected a 17-mile Energy Transfer gas pipeline meant to help feed the fuel-cell system, citing water use, emissions and thin state revenue, which makes an August in-service target unlikely.

The cost overruns rest on a single reporting account and have not been confirmed by Oracle, which has publicly detailed only the fuel-cell decision, not the budget impact. The strain shows elsewhere: Oracle has guided fiscal-2027 capital spending to $90 billion to $95 billion, well above the roughly $50 billion it expects to spend this fiscal year.

The financial stakes drew a warning this month. S&P Global Ratings cut Oracle’s issuer credit rating one notch to BBB- on July 9, citing AI capex and concentration risk tied to OpenAI, which accounts for about half of Oracle’s $638 billion in remaining performance obligations.

Whether Project Jupiter holds its budget now depends on permits Oracle does not yet have.