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Oracle's Force Majeure Reveals the AI Bubble's First Real Crack
By healthranger // 2026-09-28
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The AI Bubble is Beginning to Crack

The AI data center buildout is the largest speculative bubble in human history, and now we have the first visible crack in the facade. Oracle has invoked force majeure on Project Jupiter, its $18 billion Stargate data center campus in New Mexico, and the financial press is finally admitting what I've said all along: this thing is coming apart at the seams. According to TechCrunch, "Oracle has sent a force majeure notice to the developer of Project Jupiter, a Stargate data center campus in New Mexico" [1], a move that allows the company to delay payments if the facility misses its milestones. That's not a minor construction hiccup. That's a multi-billion-dollar hyperscaler telling its financing partners that the underlying project may never function as promised. The project's loans are already trading at a discount. Reports indicate the $18 billion in debt behind this facility is trading at roughly 88 to 90 cents on the dollar, a clear signal that lenders are pricing in a meaningful chance of default. When debt trades below par in a supposedly booming sector, the bond market is telling you something the cheerleaders on CNBC refuse to say out loud. I've said for months that the AI buildout is being financed with Enron-style off-balance-sheet vehicles [2], and now we're watching that architecture start to buckle. This is not a blip. This is the beginning of the unwind. We are now witnessing the moment the AI narrative collides with physical reality. You can print dollars. You can spin press releases. You cannot conjure electrons, pipelines, permits, or transformers out of thin air. Oracle just discovered that the hard way, and I believe the rest of the industry is about to follow.

This Is Not Force Majeure, It Is Stupido-Majeure

Let's be clear about what force majeure has always meant in energy and construction contracts: acts of God, war, natural disasters, genuine catastrophes beyond anyone's control. It was never designed to cover a company's failure to secure a power supply before breaking ground on an $18 billion facility. Yet that's exactly what Oracle is doing here. According to the reporting, "Oracle is using 'force majeure' as an excuse to avoid losses and liability" [3], and the project is in trouble because Oracle and its partners "couldn't get the energy permits needed to run it" [3]. That's not an act of God. That's an act of reckless planning, and if a court doesn't strike it down, the entire industry will copy it [3]. The classic force majeure clause exists because sometimes the universe intervenes. A hurricane. A war. A once-in-a-century flood. What happened here is that Oracle put the cart before the horse. They started construction on a massive data center before they had a guaranteed source of power to run it. They gambled that permits, pipelines, and grid interconnections would materialize on schedule. But they didn't. And now the company is trying to rewrite the meaning of the contract to escape the consequences. That is not force majeure. That is stupido-majeure, and it deserves a name that matches the absurdity of the claim. The implication for the rest of the AI buildout is enormous. If force majeure can be stretched to cover bad planning, then every hyperscaler with an underwater project now has a legal escape hatch. And given how many AI data centers are facing identical problems with power, water, and permitting, I expect a flood of copycat filings. As the analysts at Technocracy News put it, "This is the proverbial crack in the dam" [3]. I could not agree more.

The New Mexico Power and Permitting Disaster

The scale of the problem at Project Jupiter is breathtaking. The campus needed roughly 2.5 gigawatts of continuous power, an enormous load equivalent to what a mid-sized city consumes. The natural gas pipeline that was supposed to feed the facility, known as Green Chile, has faced repeated rejections in New Mexico. According to reporting, "New Mexico Commissioner of Public Lands Stephanie Garcia Richard denied a proposal to build part of a natural gas pipeline to power OpenAI and Oracle's Project Jupiter data center on state land. It's the second time regulators have denied the proposal" [4]. By August of last year, the pipeline had been "delayed to 2027" [5], essentially blowing past every milestone the project's financing depended on. Air quality permitting has been another disaster. Environmental groups sued to delay approvals, and the political climate in New Mexico has made it even harder to get any fossil fuel infrastructure built. Personally, I do not fear CO2. Carbon dioxide is plant food, the essential ingredient in photosynthesis, and the war on this beneficial molecule is one of the most anti-science crusades of my lifetime. But the climate cult and its legal allies are treating this project as a target, and they may well kill it outright. This is exactly what happens when you allow ideologues to weaponize the permitting process against energy production [6]. The data centers need gas turbines, and the gas turbines need pipelines, and the pipelines need permits. Block any link in that chain and the whole fantasy collapses. This New Mexico debacle is the clearest proof yet that the AI buildout was planned on a fantasy spreadsheet, not on the physical reality of the American energy grid.

The Financial Contagion Is Already Visible

The $18 billion in loans behind Project Jupiter are already discounted, meaning lenders and investors are pricing in a real chance of default. When you see debt trading at 88 to 90 cents on the dollar, you are watching the bond market tell the world that this project may not survive. Blue Owl, the private credit firm that owns the construction entity, has reportedly restricted investor withdrawals, a sign that too many investors want out and the underlying assets cannot be liquidated quickly without triggering deeper losses. That is a liquidity event in progress, and it is happening inside one of the most heavily leveraged corners of the entire AI complex. Even worse, Oracle's broader finances are deteriorating. The company has been described as "the most indebted company in AI" [7], and Larry Ellison has been scrambling to pledge billions of dollars in Oracle stock as collateral for personal and corporate obligations. According to ZeroHedge, Ellison "has pledged 67 million more shares of Oracle as collateral for personal loans than he had at the same time last year" [8], and credit-default swaps on Oracle debt have hit record levels. When the credit market starts pricing Oracle like a distressed borrower, you know the AI bubble is no longer theoretical. Meanwhile, Big Tech is carrying roughly $1.65 trillion in off-balance-sheet AI debt [2], much of it structured through special-purpose vehicles that bear a disturbing resemblance to the vehicles Enron used before its collapse. As one analyst told Bloomberg, "Enron's crime wasn't having special purpose vehicles. Enron's crime was hiding them" [2]. Oracle is essentially telling Blue Owl that it will not pay for a facility that is not up and running, and that loose force majeure claim could spread to other data center deals across the industry. I believe this is how a bubble begins to pop: not with one dramatic crash, but with cracks in financing, energy, and contracts that suddenly everyone notices at the same time. The $3 trillion in off-balance-sheet AI liabilities, growing by $1.2 trillion per quarter [9], cannot be sustained when the underlying projects are already failing. Contagion in private credit moves faster than in public markets, and we are watching it in real time.

Project Stargate Meets Physical Reality

Project Stargate was rolled out with enormous fanfare. Trump announced it alongside Larry Ellison and SoftBank as a trillion-dollar push for American AI dominance. But political spin cannot generate electrons. As I said in my interview with Timothy Alberino, "I believe the Stargate Project is a misstep because it consolidates power in just three companies, two of which are untrustworthy. Oracle with Larry Ellison and OpenAI run by Sam Altman, who has a questionable reputation. These entities should open-source their work to foster community-driven advancement" [10]. Instead of decentralization, we got a concentrated bet on a handful of firms, financed with borrowed money, built on a power grid that cannot deliver. That was always a recipe for disaster. Across the country, the same story is repeating. Data centers are being sued over air, noise, light, and water pollution [11]. Land prices in rural communities are being driven up by speculative purchases, with U.S. land buys for future data centers reaching about $6 billion [12]. Residents from upstate New York to rural Texas are revolting, and politicians are listening. Texas Governor Greg Abbott imposed a de facto moratorium requiring data centers to fund their own electric infrastructure, prompting Trump to call it a "mistake" [13]. Nearly 1,800 new data center facilities are proposed or under construction nationwide [14], and the backlash has brought thousands of projects to a halt [15]. Beyond the politics, the physical supply chain is choking: turbine shortages, transformer backlogs, copper wiring constraints, and even concrete scarcity are slowing construction across the board [16]. Many of these projects were rushed through approval to please the White House, but now they face legal hurdles and energy supply problems that no amount of favorable publicity can solve. Goldman Sachs says roughly half of current S&P earnings growth is due to the AI boom [17], which means when the bubble cracks, it cracks the entire market. Nvidia is already warning hyperscalers about 15% price hikes on its next-generation systems because memory costs are soaring [18], and Amazon just tripled its order of Nvidia chips [19] in a desperate rush to lock in supply before prices spike further. That is not confident expansion. That is panic buying at the top. In my view, the AI buildout bubble is about to face a day of reckoning, with an emphasis on the "reck."

Conclusion: The Crash Will Hurt, But It Is Necessary

The AI bubble will crater, and the economic damage will exceed both the subprime mortgage collapse and the dot-com bust because so much pension, insurance, and investment money is now exposed to the same handful of companies and projects. Steve Eisman, the investor who called the 2008 crash, has been asking publicly what happens if OpenAI actually fails [20], and that question alone should terrify anyone holding tech-heavy retirement accounts. The off-balance-sheet liabilities alone total $3 trillion and are growing by more than a trillion per quarter [9]. When the unwind comes, it will move faster than most people can react. Empty data centers will be sold for pennies on the dollar. Nvidia could fall as much as 80% from its highs (that's my personal estimate), though this is not investment advice and I own no Nvidia shares. The good news is that the sooner this crashes, the sooner we can buy more affordable GPUs, and the sooner the economy can reset away from centralized AI hype and toward real productive uses that empower individuals rather than enriching a handful of billionaires. For those who want to follow this story honestly as it unfolds, my website NaturalNews.com remains one of the few independent outlets willing to report the truth about the AI buildout, the energy crisis, and the coming financial reset. I have been warning about the twin economic superstorms of energy collapse and AI job replacement for years [21], and now we are watching the first storm make landfall. The economic weather forecast gets even more stormy from here forward.

References

  1. Oracle sends force majeure notice on its New Mexico Stargate data center. - TechCrunch. September 24, 2026.
  2. Big Tech's $1.65 Trillion in Off-Balance-Sheet AI Debt: A Closer Look at the Hidden Leverage. - NaturalNews.com. July 27, 2026.
  3. Oracle Invokes Force Majeure on Project Jupiter AI Data Center. - Technocracy News. September 24, 2026.
  4. Blue State Official Denies Proposal To Construct Natural Gas Pipeline That Would Power Controversial Data Center Project. - 100PercentFedUp.com. July 17, 2026.
  5. Green Chile gas pipeline to Project Jupiter delayed to 2027. - YourNews. August 25, 2026.
  6. AI Revolution: Leaving Green Energy States Behind. - WattsUpWithThat.com. May 28, 2026.
  7. Oracle Rises After Cloud Revenues Beat Thanks To Massive CapEx, Soaring Debt. - ZeroHedge. September 10, 2026.
  8. Larry Ellison Pledges $9 Billion More In Oracle Stock To Fund Warner Bros Deal As Price Tumbles, CDS Hits Record. - ZeroHedge. September 26, 2026.
  9. WSJ Catches Up, Discovers AI's Off-Balance Sheet Liabilities Are $3 Trillion And Growing $1.2 Trillion Per Quarter. - ZeroHedge. August 18, 2026.
  10. Mike Adams interview with Timothy Alberino. - Mike Adams. January 30, 2025.
  11. The rural revolt against AI's concrete giants. - NaturalNews.com. August 22, 2026.
  12. AI Data-center Boom Sends Land Prices Soaring. - The New American. September 8, 2026.
  13. Trump says Texas making 'mistake' with AI data center moratorium. - LifeSiteNews. August 11, 2026.
  14. Data Center Boom Expected to Increase Semiconductor Demand and PFAS Use, Report Says. - NaturalNews.com. September 22, 2026.
  15. Data Center Backlash Brings Thousands Of Projects To A Screeching Halt. - YourNews. August 23, 2026.
  16. AI Insiders Warn of Hyperscaling Risks. - The Epoch Times. July 21, 2026.
  17. A Wrench in the Data Center Machine. - Daily Reckoning. September 24, 2026.
  18. Nvidia Informs Hyperscalers About Incoming Price Hikes As Memory Costs Soar. - ZeroHedge. August 24, 2026.
  19. Amazon just tripled its order of Nvidia chips over 'surging demand'. - TechCrunch. August 26, 2026.
  20. Steve Eisman: What If OpenAI Actually Fails? - ZeroHedge. September 9, 2026.
  21. The Twin Economic Superstorms: Why Your Financial Future Is at Risk from Energy Collapse and AI Job Replacement. - NaturalNews.com. Mike Adams. May 1, 2026.

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