Oracle gave up part of the $300 billion project with OpenAI. The problem was the environment

Oracle, which supplies cloud capacity to major Internet companies, is on the move to partially change a project under a $300 billion contract with OpenAI. Over the objections of local residents and environmental activists, the company has abandoned the construction of a gas-fired power plant to power a data center in New Mexico. To circumvent the problems, Oracle is forced to resort to experimental technologies.

Oracle has abandoned plans to power its joint data center Project Jupiter with gas turbines and diesel generators, the company announced in late April. This was brought to the attention of Business Insider.

Instead, Oracle decided to partner with fuel cell manufacturer Bloom Energy to generate electricity directly at the site. Bloom's units turn natural gas, biogas or hydrogen into electricity without combustion, a technology that produces fewer greenhouse gas emissions, Oracle says.

However, fuel cell technology has not yet been applied at the scale needed for a Project Jupiter-level data center, Business Insider points out. Oracle said that its partnership with Bloom Energy could provide the data center with up to 2.8 gigawatts of power - this could be enough to power more than 2 million homes or more than 7,000 Tesla Model 3s, the publication writes with reference to the calculations of the U.S. Department of Energy. For Bloom Energy, this is the largest data center partnership to date. In 2024, Bloom announced the construction of "the world's largest fuel cell plant" with a capacity of 80 megawatts in South Korea: but such generation is only a small part of what needs to be built for Project Jupiter, notes Business Insider.

Oracle's abrupt change of plans was an example of how unpredictable building AI infrastructure is becoming, notes Business Insider. This unpredictability is only getting worse: the largest technology companies have entered the battle for the increasingly scarce energy resources needed to scale.

"Everyone is trying to build capacity to meet this demand," Patrick Hughes, senior vice president of industry affairs at the National Electrical Manufacturers Association, told Business Insider. He called the pace of data center construction "unprecedented" and compared the race to AI and the battle for power to the Wild West.

Utility companies across the country have been overwhelmed by requests from data centers to connect to the power grid, Hughes explained. "You [cloud companies] have to balance supply chain challenges and availability, cost, and the speed at which you can get permits and build a facility."

In March and April, the U.S. Federal Energy Regulatory Commission and the New Mexico State Land Office denied requests from developer Oracle related to a proposed natural gas pipeline that would have supplied fuel for Project Jupiter. The company also ran into difficulties in obtaining permits to build the power plant. It eventually withdrew the requests.

In order not to wait for years for a connection, many developers are moving to the BYOP model - bring your own power - and plan to provide their own power right on the site, BI writes. Oracle is making a big bet on BYOP. In addition to Project Jupiter, the company has announced plans to build gas-fired power plants at two more of its projects under contract with OpenAI. Both are in Texas, the publication reports.

Project Jupiter is facing two lawsuits filed by the New Mexico Environmental Law Center on behalf of local activists. NMELC claims that officials approved the data center before key assessments of its impact on the environment, water resources and the local community. However, after the power source change, controversy remains. NMELC has the same concerns about Bloom Energy's fuel cell technology that it had about the gas-fired power plant, Business Insider writes.

In December, Bloomberg wrote that Oracle pushed back the completion date of part of the data centers for OpenAI from 2027 to 2028. The postponement was due to a shortage of workers and materials, the agency claimed. Oracle denied this report at the time.

This article was AI-translated and verified by a human editor