Oracle (ORCL) has spent two years telling Wall Street it can build AI infrastructure faster than anyone else.
A land commissioner in New Mexico just made that harder.
On Monday, Oracle stock fell about 3.5% to a fresh 52-week low, trading near $122 after touching $120.03 earlier in the day.
The trigger for the drop wasn't financial. It was regulatory.
New Mexico's top land official rejected, for the second time, a natural gas pipeline meant to power Oracle's "Project Jupiter" data center.
Normally, investors would shrug off a headline like that. However, this time they didn't, and the reason says a lot about where Oracle stands right now.
Project Jupiter is a 2.5-gigawatt data center campus in Doña Ana County, part of the wider $500 billion Stargate initiative Oracle and OpenAI are building for AI infrastructure.
Running this data center takes a huge amount of power. The facility relies on on-site fuel cells fed by natural gas.
That gas needs a pipeline to be moved. The proposed route was a 17-mile pipeline from El Paso, built by Energy Transfer (ET), that would cross a short stretch of state trust land.
New Mexico Land Commissioner Stephanie Garcia Richard initially said no to the pipeline application.
In a July 14 letter, she again denied the rights-of-way, having first rejected the application in March, KOB reported.
Her reasoning was blunt. The project, she wrote, offered little benefit to the state's land trust or local community, while carrying clear environmental risk.
Why the commissioner pushed back:
Emissions: Project Jupiter is forecast to emit more than 10 million tons of greenhouse gases a year, more than double the city of Albuquerque's total, according to Santa Fe New Mexican.
Water: The campus draws heavily on water in an arid region already under strain.
Return: State officials concluded the project would enrich private backers far more than New Mexico's public institutions.
A local permit fight would not normally move a mega-cap stock. This one did because of what it threatens next.
Oracle needs Project Jupiter online to compete with cloud hyperscalers on the AI compute market. A blocked pipeline application puts that timeline at risk.
Oracle has already said missing its power schedule would push costs up. Rerouting around state land could add billions to the bill.
Research firm SemiAnalysis now expects power at the site in 2029, not 2027, Pete Dinelli reported. The project still lacks an air quality permit and a gas line.
Source: Yahoo Finance Top News — This article was automatically imported from the source. Read full article at original source →
