Oracle's "Project Jupiter" Loans Trade at a Discount, Highlighting AI Data Center Financing Strain

CoinDesk, citing overseas reports, says Oracle's massive New Mexico data center buildout known as "Project Jupiter" is showing signs of strain in credit markets. Roughly $18 billion of loans linked to the project have recently traded around 89–91 cents on the dollar in the secondary market, a level that suggests investors are demanding a steeper discount to hold the debt. The discount does not imply Oracle has defaulted. A more straightforward read is that the banks that arranged the financing have not been able to syndicate and place the loans with institutional investors as originally planned, leaving the market to price in execution risk. Reuters, citing the Financial Times, reported that lenders including Santander and Jefferies participated in the financing. With buyer demand softer than expected, banks have ended up retaining a larger share of Oracle-related exposure. The markdown reflects concern that construction and commissioning are lagging. The report says Project Jupiter is at least seven months behind schedule. Delays have been tied to permitting and approvals, insufficient power infrastructure, and local opposition. A related application tied to gas supply for a 2.2-gigawatt gas turbine was also rejected. For a data center development, slippage translates quickly into financial pressure: interest and other borrowing costs continue to accrue, while the project cannot generate operating cash flow until it is up and running. The article argues the issue is not demand. Oracle's remaining performance obligations are said to have climbed to about $66.4 billion, including more than $3 billion in new AI cloud contracts. Oracle has also reported 121% growth in cloud infrastructure revenue, pointing to rapid expansion in its AI cloud business. Investor focus, though, has shifted to cash recovery and capital intensity—how much additional funding Oracle must commit before backlog converts into revenue and cash. In capital-heavy AI infrastructure, surging orders do not automatically ease near-term financing strain. Market scrutiny has increased after a ratings action. In July, S&P cut Oracle's rating from BBB+ to BBB, leaving it at the lowest rung of investment grade. Oracle has continued with layoffs and cost-cutting while stepping up capital spending on AI infrastructure. The report frames these signals as risk being priced more explicitly rather than a verdict on Oracle's AI strategy. As funding for AI infrastructure scales up, project timelines, approval outcomes, and access to reliable energy supply are expected to play a more direct role in financing costs. In broader context, the article places the episode within a wider AI infrastructure funding boom, arguing markets are reassessing debt risk tied to an estimated $3.6 trillion buildout.