Oracle Corp.’s force majeure notice to the developer of a massive New Mexico data center is putting loan and lease documents under fresh scrutiny and adding to the challenges facing companies looking to tap debt markets to finance the AI buildout, according to Morgan Stanley.

“We would expect the greatest sensitivity in transactions with substantial remaining construction or completion risk and those backed by weaker-quality tenants,” analysts including Lindsay Tyler and Vishwas Patkar wrote in a note Friday. “Conversely, assets close to stabilization or those with limited construction risk exposure should be better insulated from these concerns.”

Firms looking to raise billions to fund artificial intelligence infrastructure are already grappling with rising borrowing costs, heavy supply that’s pressuring risk premiums, and a groundswell of opposition to data centers across the US. Oracle’s move to shield itself from costs if the New Mexico facility is delayed has added contractual uncertainty to a market already under strain, according to the analysts.

“A key question is whether this remains an idiosyncratic dispute or establishes a precedent that other tenants could seek to invoke,” they wrote. “Similar action by another high-quality hyperscaler would likely carry greater significance for the market and warrant a broader reassessment of contractual protections.” The force majeure notice sparked a sharp widening in data center bonds Thursday, while the cost of protecting Oracle’s debt against default for five years surged to a record. Morgan Stanley doesn’t see Oracle’s move as a means for the hyperscaler to avoid its debt obligations, but remains cautious on the issuer given its cash burn, elevated adjusted leverage and ongoing ratings risk.