About $18bn of loans tied to a data centre leased to Oracle in New Mexico slid into stressed territory on Friday, highlighting investor fears that local backlash will derail the tech group's AI infrastructure build-out. Loans linked to "Project Jupiter" were quoted at 89 to 91 cents on the dollar by banks including Santander and Jefferies.

The 1,400-acre campus in Doña Ana County is central to Oracle's $300bn contract with Open AI. The project secured $18bn of loans late last year, plus equity from Blue Owl. Efforts to offload the debt have stalled over Oracle's borrowing and declining creditworthiness. Banks now hold more Oracle-linked debt than planned.

Oracle's stock has plunged 50 per cent since the Open AI deal. Project Jupiter faces local opposition over water and air quality. The state land office blocked a gas pipeline request. Deb Haaland, New Mexico's Democratic gubernatorial nominee, said she would pause all new data centres if elected. A poll found 65 per cent of residents opposed large data centres.