The circa 5.5% drop in Oracle shares shows investors are sensitive to any sign that power constraints could delay AI capacity and push out the timeline for its free cash flow to turn positive. The force majeure notice on Project Jupiter raises the risk of disputes and delays at one of its most important sites. For natural gas, data centre demand is becoming a meaningful new source of consumption, and paying around four times hub prices for trucked supply shows how price-insensitive AI developers are when timing is at stake. Gas pipeline operators such as Energy Transfer and virtual pipeline providers stand to benefit from that urgency.

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The AI boom has reached the point where one of the world’s biggest cloud companies is paying four times the going rate to have gas driven to its servers by truck.

Summary:

• Oracle is trucking compressed natural gas to data centres in Utah and Texas while waiting for pipelines, Bloomberg reported, citing people familiar
• The company is considering the same approach for Project Jupiter in New Mexico, where a pipeline delay threatens the timeline
• Oracle sent a force majeure notice to the New Mexico project’s developer last month
• Trucked gas costs roughly four times pipeline hub prices once labour, equipment and fuel are included
• Powering just 100 megawatts of the site’s planned 2.45 gigawatts this way would mean each large trailer supplying about 40 minutes of power
• Oracle shares fell circa 5.5% after the report

Oracle is trucking compressed natural gas directly to some of its AI data centres to keep construction and early operations on schedule while it waits for pipelines to be built, Bloomberg (gated) reported, citing people familiar with the work. The company’s shares fell circa 5.5% after the report.

Truck deliveries powered a data centre on the outskirts of Salt Lake City for more than a year before a pipeline was completed, and the same approach is supporting initial work at a campus Oracle is building for OpenAI in Shackelford County, Texas, according to the report. Oracle is now considering trucked gas for Project Jupiter in New Mexico, one of its most important sites, where a pipeline delay is threatening the timeline. Last month Oracle sent the project’s developer a notice citing force majeure, which may shield it from some payments if delays continue. Pipeline operator Energy Transfer had to reroute the line after state regulators rejected the original route, pushing its targeted start-up from this summer into next year.

The workaround is expensive. Once labour, specialised equipment and fuel are included, trucked gas costs roughly four times the price of gas delivered through a major pipeline hub, according to one energy analyst. The scale is also daunting: powering just 100 megawatts of Project Jupiter’s planned 2.45 gigawatts would mean each large trailer supplying only about 40 minutes of electricity, an analyst at a chip and AI research firm said.

The episode shows how power, rather than chips, has become the binding constraint on the AI build-out, and how far companies will go to avoid delays. Oracle has staked billions of dollars and its reputation on delivering capacity quickly, and its free cash flow is expected to stay negative until more of these sites are complete. Paying a premium for energy fits the wider argument, made this week by writer Derek Thompson, that the AI boom is bidding up electricity and other inputs for the rest of the economy.

For gas markets, the episode points to growing demand from data centres and a niche boom for virtual pipeline suppliers such as Certarus and VoltaGrid. The key test will be whether trucked gas can scale at Project Jupiter, and whether the New Mexico pipeline arrives on its revised schedule. 

Gonna need a bigger truck … 

This article was written by Eamonn Sheridan at investinglive.com.