Oracle’s $18B Project Jupiter Loan Is Flashing a Warning From the Credit Market

Oracle’s enormous AI infrastructure push is producing a warning signal from an unusual place: the credit market.

Around $18 billion of loans tied to Project Jupiter, Oracle’s massive New Mexico data-center development, are being quoted at roughly 89 to 91 cents on the dollar, according to a Financial Times report carried by Reuters.

That does not mean Oracle has defaulted. It means investors are demanding a meaningful discount to buy debt that banks originally expected to distribute more easily.

Why 89 Cents Matters

Large project loans are typically arranged by banks and then distributed to institutional investors. Santander and Jefferies were among Project Jupiter’s lenders, but banks are reportedly holding more Oracle-linked debt than expected because investor demand has weakened.

The discount effectively puts a market price on execution risk.

Project Jupiter is reportedly at least seven months behind schedule, while permitting, power infrastructure and local opposition have complicated development. A request connected to supplying natural gas for planned 2.2-gigawatt gas turbines was also rejected.

Those delays matter because debt costs continue even when a data center takes longer to begin generating revenue.

The problem mirrors the broader AI data-center debt risk: enormous infrastructure must often be financed years before its economics are fully proven.

Oracle Has Demand, But Financing Still Matters

Oracle does not appear to have a demand problem.

Its remaining performance obligations reached roughly $664 billion, helped by more than $30 billion of additional AI cloud contracts. Meanwhile, Oracle Cloud Infrastructure revenue recently jumped 121%, highlighting how rapidly its AI cloud business is expanding.

The question is how much money Oracle must spend before that backlog becomes cash.

S&P downgraded Oracle from BBB to BBB- in July, leaving its credit rating at the lowest investment-grade level. At the same time, Oracle has pursued further layoffs and cost reductions while pouring capital into AI infrastructure.

Signal Meaning $18B loans Major financing exposure 89–91 cents Debt trades below par BBB- rating Lowest investment grade 7+ month delay Execution risk $664B backlog Strong contracted demand

The signal is not that Oracle’s AI strategy has failed. It is that lenders are beginning to put a visible price on the risks behind the wider $3.6 trillion AI infrastructure financing boom.