Oracle raises alarm over AI datacenter

0:00Welcome to Seeking Alphas Wall Street Lunch, our afternoon update on today's market action news and analysis. Good afternoon, today is Thursday, September 24th, and I'm your host, Kim Kahn. Our thoughts story so far. Oracle is sent a force-mejorer notice to the developer of a massive data center project in New Mexico to protect itself from potential payments if the facility is delayed, Bloomberg reported. The project Jupiter site is designed to have 2.45 gigawatts of capacity and is part of the broader Stargate AI infrastructure effort involving Oracle, OpenAI, and Softbank. The data center is being developed by Stack Infrastructure, a portfolio company of Blue Owl Capital, Oracle is the main tenant. Oracle Softbank and Blue Owl are lower as is Bluem Energy, whose cells are planned for use of the facility. Oracle is seeking to defer payments if the project is delayed and does not come online as planned in 2028. It was not immediately clear whether the notice would release Oracle from its existing financial obligations.

1:01New research from the Brookings Institution projected that the AI infrastructure boom could require $10.3 trillion of US investment through 2032. Spending on data centers, power systems, networking, and specialized computing equipment could average about 3.6% of US GDP annually, the study said. That would make the AI build out larger than historic US investment booms in railroads, highways, electrification, and telecom. But a growing share of the financial risk is expected to shift away from big tech balance sheets and into less transparent financing structures, making overall exposure harder to assess. Concerns about rising borrowing costs or AI capex have contributed to the latest rise in treasure yields. Yields are easing back a little today, but not before the 10-year top 5.15%, and the 30-year hit 5.44%, its highest level since 2004. Among active stocks, Blackberry reported QT results above estimates and raised its fiscal 27 revenue and profit outlook, helped by demand for its QNX automotive software.

2:01MGM resorts is tumbling after Barry Dillard's People Inc. with drew its takeover offer. There are lots of ingredients that go into a proposal of this kind on its way to completion, Dillard said. We didn't feel the mix was coming together in the way we had hoped, and have decided not to pursue taking the company private at this time. When oil stocks are in focus as the oil and gas industry launches a coordinated lobbying campaign to block a potential ban on US diesel exports after President Donald Trump signals such a proposal, warning that trade restrictions would spike domestic fuel prices. Chevron CEO Mike Worth, Philip 66 CEO Mark Lashir, and other senior executives, started calling their contacts in the administration to push back on the idea of a ban according to the Wall Street Journal. In another news of note, Meta platforms unveiled Meta Charm, a handheld AI device at its connect event Wednesday. Roughly the size of an AirPods case, Charm features a 2-inch OLED touch screen and built in 5G connectivity. CEO Mark Zuckerberg said, we pack the whole music experience, including the whole real-time voice and avatar stack, into something that fits on a keychain and is always available

3:05to talk to. Meta also unveiled a virtual reality headset and a glasses form factor, combining 3D entertainment, immersive sports, and a virtual workspace with a device set to go on sale in spring for $12.99. That's all for today's Wall Street lunch. Look for links for stories in the shownet section. Don't forget, these episodes will be up with transcriptions at SeekingOffa.com, slash WSP. And for a wealth of coverage on stocks and ETS, go to SeekingOffa.com, slash subscriptions.