Oracle’s AI Ambitions Face Operational and Legal Challenges

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Oracle is aggressively expanding its infrastructure to secure a pivotal role in OpenAI's "Project Jupiter," even as operational disruptions and a new legal probe create headwinds for the technology giant. This mix of strategic advancement and concurrent difficulties presents a complex picture for investors.

Despite a challenging start to the year, Oracle's stock appears to be attracting interest from large-scale investors. Recent filings indicate that institutional players, including Chilton Capital Management, have significantly increased their holdings. This accumulation is occurring against a backdrop of notable share price pressure. The equity has shed approximately 15% of its value since January, with its current trading price around €165.90. This leaves the shares trading roughly 41% below their 52-week high.

A Multi-Billion Dollar Bet on AI Infrastructure

The company's massive push into artificial intelligence is underscored by its confirmed involvement in a major New Mexico development. Oracle is reported to be the anchor tenant for the "Project Jupiter" data center campus in Doña Ana County. The facility, being developed by Stack and BorderPlex, spans 1,400 acres and is explicitly designed to meet the vast computational demands of OpenAI.

Total project investment could reach an estimated $165 billion. Oracle has committed to tax payments exceeding $600 million, alongside direct payments to the county. To reduce reliance on the local power grid, the site is planned to incorporate its own natural gas power plants and battery storage systems.

Mounting Operational and Legal Scrutiny

However, this expansion phase is accompanied by significant challenges on two fronts. Operationally, Oracle's cloud division faced criticism due to service outages at TikTok. TikTok USDS, a joint venture in which Oracle holds a 15% stake, experienced significant disruptions attributed to a power failure at a U.S. data center. Given Oracle's legally mandated role in hosting U.S. user data for the platform, the incident drew immediate political attention, prompting California's governor to announce a review.

Simultaneously, potential legal trouble is emerging in the bond market. The law firm Girard Sharp LLP has initiated an investigation on behalf of bondholders. The probe focuses on debt issuances from autumn 2025 totaling $56 billion. Investigators are examining whether Oracle's offering documents contained misleading statements regarding its capacity to support AI expansion, particularly in light of its $300 billion contract with OpenAI.

The central task for Oracle now is to balance its aggressive infrastructure growth with operational stability, aiming to reassure the market and address these legal concerns.