Oracle cites 'force majeure' to shield itself on controversial data center

Oracle cites 'force majeure' to shield itself on controversial data center bloomberg.com

153 points•simonpure•7 days ago•151 comments•

#data #force #oracle #center #shield #controversial #cites #majeure

https://qz.com/oracle-force-majeure-new-mexico-ai-data-cente...

151 comments

I realize there’s a lot of hate in this thread, but I think there’s another side to this.

Force majeure is basically there for situations where something outside a company’s control prevents them from delivering on a contract.

I can see Oracle’s argument here. A number of states and local governments that were originally very supportive of new data centers, including places like Texas and Pennsylvania, have since started blocking or restricting new construction.

If Oracle signed these contracts and the government later changed the rules and have stopped those projects from moving forward, it’s hard to argue they should still be held to the same delivery commitments.

(That seems pretty close to the type of situation force majeure is meant for.)

mhurron6 days ago

> the government later changed the rules

Did they, or was it found that they had ignored them and are now being forced to follow the law? Those state and local governments were so supportive that the processes for approvals and reviews was all done in secret and without necessary inputs. You know, the things the laws in those areas said you had to do.

In this particular project, it looks like Oracle and Blue Owl Capital singed the contract before state regulators reviewed and provided necessary approvals.

https://www.datacenterdynamics.com/en/news/new-mexico-regula...

And not seeking necessary regulatory approval doesn't really seem like things 'beyond their control.'

tiffanyh6 days ago

Maybe some are not as familiar with this, but I'll use Texas as an example.

In 2025, Texas state government announces a $40B infrastructure investment specifically calling out building data centers for AI as a key part of that package.

https://gov.texas.gov/news/post/governor-abbott-google-annou...

Then, just this week, Texas government reverse their position and halts permits for all data centers:

https://gov.texas.gov/news/post/governor-abbott-directs-tceq...

I'm not trying to defend Oracle, but I can understand their perspective on this.

If the state government is only now blocking what their contract commits them to deliver, it's unreasonable.

ipython6 days ago

In that case, would the people caught unemployed and with upside down loans in the 2008 financial crisis would have a reasonable argument for "force majeure" to cancel their mortgages? ... After all, they had a reasonable expectation that the economy would continue to support their employment, either with their current employer or by finding a new job that paid just as well?

at some point the phrases loses its meaning if it becomes applicable to pretty much anything.

twoodfin6 days ago

Cancel their mortgages and keep their houses?

I don’t think Oracle is proposing they get a data center they didn’t finish paying for.

tiffanyh6 days ago

In your example, governments we not enacting new regulation that banned you from getting a new job.

In this situation, governments are now enacting new regulation that ban companies like Oracle from building new data centers.

eli_gottlieb6 days ago

I mean yeah it's a political choice. Big firms get to call force majeure. Households do not.

cmiles86 days ago

A hurricane wipes out your data center and someone sues you for it not being finished on time. Thats what force majeure is for.

You made a series of bad business decisions != force majeure.

As the AI bubble starts to pop we’re going to see a lot of creative claims as everyone rushes for the exits and the debt bomb behind all this infra lights off.

red-iron-pine6 days ago

force majeure may not cover you even in the case of hurricanes.

the idea is that force majeure is for things that you could not forsee, could not plan for, and could not stop even if you were aware.

if your company sets up shop in a hurricane prone area but then fails to keep servers in other colo / cloud locations -- and then goes down cuz a hurricane inevitably hits Florida, you absolutely can get sued and lose.

staticautomatic6 days ago

My recollection from law school is that force majeure is more like a specific subset of "impossibility of performance", which is to say it's not generally the same as "something outside a company's control."

gehsty6 days ago

I can’t see what the event that has caused a force majeure claim is, though local opposition is not unexpected in any infrastructure buildout - I would be surprised if that is permitted / accepted.

All the reporting is about delaying payments, not a good look, and definitely undermines the FM claim. FM generally speaking needs something truly in expected and outside of control - COVID / maybe a literal war in the region your a working in. Increased cost exposure and push back from local opposition would not clear the FM bar in my experience.

giancarlostoro7 days ago

I really don't get who keeps using Oracle outside of Java, and how they make their money, must be some legacy contracts or something, but Oracle has always been customer hostile, from all the things I've heard, they sound like a ransomware company (idk if they still do it, but they'd sell you the database, then "audit you" and if you used anything that wasn't in compliance, fine you, until you converted that to Oracle DB too or whatever wild stuff). I just don't get it. I get even less how its execs are okay running what could be a much more successful company so poorly. You can change Oracle for the better and become even more profitable if you change how you do business.

Take Java as a solid example, they removed JavaFX from the core of Java, which made everyone think JavaFX was dead, recently they started providing enterprise support for JavaFX, which signals its production ready, but, who wants to trust Oracle? I sure don't. I can use C# for free without any of that baggage, and if I get all sorts of stable options for a GUI, and with Avalonia (and Uno?) I can run my GUI on any OS.

pwg7 days ago

> I really don't get who keeps using Oracle

"Enterprise" is still very much in the camp of "using Oracle". Which is likely how they survive despite being so customer unfriendly. "Enterprise" users are simply using what "the enterprise" purchased and have little choice in the matter.

giancarlostoro6 days ago

Every enterprise company I've worked for that used Oracle either completely migrated from it or is / was in the process of doing so, which is why I asked my question. I don't see startups lining up to do Oracle either, not in the way old businesses used to.

zahlman7 days ago

Is there a list somewhere of major "enterprises" in this position? I've always kinda wondered how Java keeps its edge over C# in the TIOBE rankings.

robertlagrant6 days ago

It's only relatively recently (in the lifespan of large companies) that OSS alternatives have come along that can do much more of what Oracle can do. Oracle was miraculous for a long time. It was also a huge pain to operate (source: I know people who've operated it), particularly in its RAC configuration, but if you could operate it you could run a bank and rely pretty well on Oracle being rock solid.

giancarlostoro6 days ago

That's fair, I'm not trying to knock on them for their tech, I'm sure some of it is solid, though Java felt like it hit a wall for years (only in like 2023 did it finally start catching up to C#... and remember Kotlin was made specifically because Java was just so... behind on so much).

bitwize6 days ago

Oracle Database is still the gold standard for data in an enterprise setting. Postgres is great, but it doesn't have the clustering or replication capabilities, or support, that Oracle does.

When you're talking about business, the software itself doesn't really matter at all. Accountability is everything. There has to be a throat you can choke, an ass you can drag onto the carpet, when it fails. That is the reason why Oracle persists as an organization: they assume accountability for the data storage layer, freeing their clients to worry about other things.

This also has implications for developers grousing about "being an accountability sink" for AI-generated code. Being an accountability sink is the business and as Larry has demonstrated, quite lucrative indeed. Developing the code is a side effect that can now be done close to 100% by machine.

coredog646 days ago

Oracle is more than Java and an RDBMS. You cannot throw a rock without hitting a Fortune 500 company running PeopleSoft and/or the Oracle ERP.

toomuchtodo6 days ago

FBI was breached via PeopleSoft. Do you think more companies would leave it if they were breached too?

https://www.404media.co/we-hacked-the-fbi-hackers-say-they-h...

https://techcrunch.com/2026/09/22/hacking-group-shinyhunters...

kakacik6 days ago

You don't have experience from corporate environment. Oracle is very much present, alive and kicking there, in 1000 and 1 little or big applications, sometimes even out of convenience and cost (is you have just 1 DBA team supporting oracle, adding even 1 postgres to production system could be a cost nightmare to support and manage.

And SQL DBs are not going anywhere in next few decades.

ebiester6 days ago

Zipcar started in 2000/2001 on Oracle and relied heavily on stored procedures, particularly in billing (as SaaS didn't exist back when it started and was a bad fit for a long time). It took an entire rewrite of the system to get off of Oracle.

giancarlostoro6 days ago

> You don't have experience from corporate environment.

Thank you for redefining my entire career, in fact, everywhere I've worked at as a developer, if they ever used Oracle either migrated completely away from it or are in / were in the process of migrating from it, including Fortune 500 companies. Which is why I asked what I asked. I'm genuinely curious.

ozlikethewizard7 days ago

Doesn't 'Force Majeure' mean exceptional events outside ones control? Pretty sure everything involved here is Oracles own making lol

chuckadams7 days ago

"No one could have predicted that permits and infrastructure necessary for this project's completion would be delayed". Except for every project that's needed permits and infrastructure ever.

I hope whoever buys Oracle fires Larry by email.

lelanthran7 days ago

> I hope whoever buys Oracle fires Larry by email.

I certainly hope not; you can't fire[1] someone via email.

============================

[1] Out of a canon. Into the sun.

sam17146 days ago

Force majeure can be defined within contracts. So if the contract said that force majeure included changes in law or failure to receive permits, then it's force majeure. There can also be a separate "change in law" provision.

One can't say whether it's valid or not without reading the actual contract and looking at the state's case law.

mckirk7 days ago

"Well a wave hit it"

throw0101c6 days ago

> "Well a wave hit it"

I'm assuming this is a reference to the classic Clarke and Dawe skit:

* https://www.youtube.com/watch?v=3m5qxZm_JqM

* https://en.wikipedia.org/wiki/Clarke_and_Dawe

4688542598537 days ago

A wave hit the Oracle?

shimman7 days ago

Finding out that Oracle has a bond rating of BBB- [1] (one step above junk bonds) feels very appropriate for such a company with such a sordid history.

[1] https://www.spglobal.com/ratings/en/regulatory/article/-/vie...

CodeCompost7 days ago

'Force Majeure' is a good way to describe their incompetence.

zahlman7 days ago

I can't reconcile that with https://news.ycombinator.com/item?id=49831204 . Everyone knows about Oracle's incompetence already and should reasonably be able to predict it, especially themselves.

Analemma_7 days ago

Right, Oracle is at the bottom of the heap (they borrowed the most with the least initial credibility— who the fuck seriously thinks Oracle was ever going to be a major player in AI), so weakness in the market will appear with them first. But I think it will bubble its way up.

bwfan1236 days ago

> Oracle was ever going to be a major player in AI

Stupidity on the behalf of management to get into AI at any cost even if it means becoming a land-lord of AI data-centers. They have good company with allbirds and other crypto-miner-turned datacenter operators. This is what a mania looks like. Hustlers of all shapes and sizes line up for dumb money which wont ask any questions. At the backend of this, these operators will be cleaned out, and sold to the highest bidders and that explains why microsoft is renting capacity, because they know at some point in the future there will be foreclosures, and they can buy on the cheap.

someonebaggy7 days ago

Oracle's specialty is extracting money from the government for everything IT-related. Why wouldn't they be a major player? Investors might not have foreseen DOGE and Grok.

dgellow6 days ago

Since July

apercu7 days ago

Still too high of a rating.

someonebaggy7 days ago

It's based solely on thejr expected ability to replay, not their ethics.

potatototoo997 days ago

Will be interesting to see what excuses these companies will come up with to justify stopping investment in AI without spelling it out. The first one was already announced: it's going to kill everyone so we need to proceed more slowly.

AnimalMuppet6 days ago

Interesting. I had been interpreting "it's too dangerous; make us slow down" as hype to get more investment and/or customers. "We don't have the money to build out" is an interesting alternate interpretation.

PunchyHamster6 days ago

I see it as "make regulation that will throttle our competition (especially foreign one)" mixed with "look at us, our AI so advanced" pre-IPO advertising

alpaca1286 days ago

Both are reasonable, but the recent hype around all the cyberattacks seems far more aggressive and specifically them arguing that they need to slow down for safety sounds very suspiciously like trying to come up with a reason for slowing progress.

bitwize6 days ago

It's hype to get Trump to regulate the import of competitive Chinese models. A regulatory capture play.

Read the full thread on Hacker News →

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