• Oracle (ORCL) is using truck-delivered natural gas to power AI data centers in Utah and Texas, bypassing pipeline delays that threaten its expansion.
  • The strategy may extend to Project Jupiter, a 2.45-GW campus in New Mexico, but trucked gas costs roughly four times more than pipeline supply.
  • The move highlights the growing energy bottleneck for AI infrastructure, with regulatory hurdles and permitting disputes complicating timelines.

Oracle's Creative Workaround

Oracle has resorted to transporting natural gas by truck to fuel its data centers, according to a Bloomberg report on October 8. The unconventional approach aims to circumvent power delays that could otherwise stall the company's aggressive AI infrastructure buildout. Already deployed in Utah and Texas, the strategy may be extended to Oracle's massive Project Jupiter campus in New Mexico, which is slated to consume up to 2.45 gigawatts.

The trucking solution, while innovative, comes at a steep cost: delivered gas is roughly four times more expensive than pipeline deliveries, according to the report. That premium underscores the desperate measures tech giants are willing to take to keep pace with AI demand. Oracle's cloud infrastructure revenue surged 121% year-over-year in its latest quarter, to $7.4 billion, and its remaining performance obligations—contracted future revenue—have reportedly reached $664 billion. Every day of delay in bringing capacity online translates into deferred revenue.

Power Bottlenecks and Regulatory Hurdles

The urgency stems from a broader energy crunch facing AI data centers. Oracle's Project Jupiter, a multi-gigawatt campus in New Mexico, relies on a planned pipeline from Energy Transfer (ET) and a behind-the-meter fuel-cell microgrid from Bloom Energy (BE). But the project has run into a permitting quagmire. On October 6, New Mexico Attorney General Raúl Torrez challenged the Federal Energy Regulatory Commission's environmental review of the Green Chile pipeline, arguing that the assessment improperly separates the pipeline's impacts from those of the data center it would supply.

Meanwhile, the state's public-lands commissioner has twice rejected requests to route part of the pipeline across state trust land, pushing the anticipated in-service date to February 2027. A key air permit for the microgrid faces a November 23 deadline. And a September 24 force-majeure notice related to power-infrastructure hurdles has added to the uncertainty, though Oracle maintains that Jupiter remains on schedule for 2028.

"The power infrastructure is the critical path," said an industry analyst who asked not to be named. "Oracle's trucking gambit is a temporary fix, not a long-term solution. Without pipelines, the economics of running a multi-gigawatt campus on trucked gas would be prohibitive."

Financial and Operational Implications

Oracle's capital spending has skyrocketed to $28.5 billion in the latest quarter, up from $8.5 billion a year earlier, and the company plans to spend $90 billion to $95 billion in fiscal 2027. The trucking strategy, while costly, may be a necessary stopgap to generate revenue from AI contracts sooner. However, analysts warn that if trucking becomes a prolonged operating model, it could erode margins.

The company has also been restructuring, cutting approximately 21,000 positions—about 13% of its workforce—during fiscal 2026. More layoffs are expected, with 70 Irish jobs targeted recently. The juxtaposition of massive infrastructure investment and workforce reductions highlights the shifting priorities in the AI era.

Oracle's co-CEOs, Clay Magouyrk and Mike Sicilia, who took over from Safra Catz in September 2025, are navigating these challenges. The company has not commented publicly on the trucking strategy, and Energy Transfer did not respond to requests for comment.

What's Next

In the near term, the air-permit decision for the microgrid and the pipeline authorization are critical milestones. If approved, pipeline gas could flow by early 2027, reducing reliance on trucking. But if delays persist, Oracle may have to choose between absorbing higher fuel costs or slowing its AI expansion. For now, the company appears willing to pay a premium to keep its data centers humming—a sign of just how strategic AI infrastructure has become.

Correction: An earlier version of this article misstated the timing of the force-majeure notice. It was issued on September 24, not in August.