The Cost of Delay

The conclusion first: the notice tilts the cost of delay toward the developer and the banks financing construction. Reuters described the contract as follows. Oracle is contractually responsible for securing the site's power. Invoking force majeure extends the period in which it pays the lower construction-phase rent. Full rent starts correspondingly later, while the overall contract term remains unchanged (Reuters republication).

Electricity is the bottleneck. The state land office rejected the route of Energy Transfer's roughly 17.8-mile gas pipeline twice (March and July). Its operating date moved back about half a year to February 1, 2027. An air permit for Bloom Energy's gas-fueled power-generating fuel cells is also pending; the state decision deadline is November 23★ (TechCrunch).

The recipient was developer Stack Infrastructure. It is a subsidiary of private-credit manager Blue Owl. According to Reuters, Blue Owl invested about USD 3 billion in equity, expecting annual returns of 9% during construction and about 11% after completion★. Most construction funding comes from USD 18 billion in loans from roughly 20 banks (Bloomberg).

Those loans were already discounted before the letter. In mid-September, the FT reported quotes of 89–91 cents per USD 1 of face value. Banks were reportedly struggling to sell the loans to other investors (FT cited in AI Weekly 9/19). The letter did not create a new worry; it put a date on an existing one.

Equipment suppliers rose; funding providers fell. In the month from 8/24 to 9/24, memory company Micron rose 18.7% and SoftBank Group 24.8% (Tokyo, through 9/25). Private-credit managers fell 9–21% over the same period. Blue Owl fell most, at −20.8%. The S&P 500 rose 0.7%.

Managers and private-loan funds (BDCs) moved differently. BDCs, listed funds holding loans originated by these managers, fell 1.6–4.6% over the same month. We read this as managers' fee streams being repriced before the loan books (our interpretation). We do not attribute the decline solely to AI.

Stocks record expectations; bonds record the bill. SoftBank issued USD 11.1 billion in bonds to borrow its final USD 10 billion for OpenAI. The 5.5-year dollar bond pays 9.25%, roughly 4.2 percentage points above a matching-maturity US Treasury. The 7.5-year pays 9.75%, roughly 4.7 percentage points more (SoftBank release).

The two markets tell different stories about the same company. Shareholders price OpenAI's growth; bondholders price the risk of delay. After the 10/1 OpenAI payment, SoftBank's cumulative investment in OpenAI will reach USD 64.6 billion. SoftBank's 5-year credit-default-swap (CDS) premium exceeded 4 percentage points★ (Reuters).

AI infrastructure is the longest promise, and long-term money is now the most expensive money. The US 10-year Treasury yield was 5.18% on 9/24. The last day at or above that level was July 6, 2007. The 30-year yield, at 5.47%, exceeded even its 2007 peak of 5.35%. The 20-year yield (5.53%) remains above the 30-year (US Treasury).

Real yields drove the rise, rather than inflation worries. From 8/25 to 9/24, the 10-year yield rose 0.54 percentage points: the inflation-adjusted real yield contributed 0.53 percentage points, and market-implied inflation (BEI) 0.01 percentage points. Along the way, the yield reached 5.01% on 9/16 and 9/18, retreated to 4.96% on 9/22, then hit 5.18% two days later. Implied inflation peaked at 2.40% on 9/10 before returning to 2.33%.

Economic data arrived in those two days. Released on 9/23, the S&P Global US composite PMI, a survey of business purchasing managers, reached 58.4, its highest in 62 months. Input prices rose most sharply since October 2022 (S&P Global). Strong data increased expectations of rate hikes.

Markets expect further hikes. The Fed raised rates to 3.75–4.00% on 9/16. On 9/24, New York Fed President Williams said another hike this year could be appropriate. Federal-funds futures price an average 4.67% next May, about 0.8 percentage points above today, or roughly three 25bp hikes. Reports put October's hike probability at 77.5%★.

AI investment heats the economy; the hotter economy raises rates; higher rates raise AI investment's funding cost. This loop suggests financing costs could set the pace before demand cools (our interpretation). The loop has not yet been proved to operate. But all three links appeared together this week.

Infrastructure spending far exceeds revenue. Estimates of this year's AI capital expenditure range from USD 697 billion to USD 800 billion (J.P. Morgan, Morgan Stanley and Aviva; not averaged). Our estimate of AI end-user revenue is USD 250–320 billion, or 31–46% of capital expenditure. Someone's money must bridge the gap.

More of that money is debt. Debt financed 32% of major cloud companies' capital expenditure over the last 12 months, up from 9% in FY2024 (FactSet, secondary source). Off-balance-sheet long-term lease commitments are estimated at USD 820 billion. When debt-funded infrastructure is delayed, interest arrives first. This is the point Jupiter's letter identifies.

Energy sets the timetable. At home, gas pipelines and air permits hold up schedules; abroad, Hormuz does. Both ask the same question: "will energy arrive on time"? A data center does not become a business simply by buying chips. Revenue starts only when power arrives.

Energy abroad — oil is back above USD 100. Front-month Brent rose from USD 99.25 on 9/22 to USD 105.97 on 9/24. Since June, its low was 7/1 (USD 71.57) and its high 9/15 (USD 108.75), using Yahoo's continuous front-month series. Our strait model sees Iran's phase of constricting passage through tolls and selective attacks continuing for a 12th day.

Yet oil prices have not spilled into rates. As section 03 shows, implied inflation is almost unchanged. Brent 2 years out is also USD 73.71, below our USD 75 threshold (an observation from 7 days ago). Markets see the oil-price shock as temporary. A signal that this belief is breaking would be the back of the curve crossing USD 75. This path remains a hypothesis.

Crypto rose during three months of more expensive money. Bitcoin stands 44% above its post-June low on 7/1 (USD 58,566), and Ethereum 71% above. Over the same period, the US 10-year yield rose from 4.48% to 5.18%. Even over just one month (from 8/24), both rose about 9%. Bitcoin's high in this period was 9/22 (USD 86,597).

Textbooks suggest the opposite. We learn that higher rates weigh first on assets paying neither interest nor dividends. That did not happen this time. Why? We use our data to narrow possible answers, without choosing one.

First possibility — the route for incoming money changed. More of the money behind this rise came through US spot ETFs than through crypto's own dollars (stablecoins). Over the past 30 days, Bitcoin and Ethereum ETFs received net inflows of USD 5.87 billion, while stablecoins grew USD 2.51 billion. Bitcoin ETFs lost USD 4.51 billion in June, then received USD 170 million in July, USD 3.54 billion in August and USD 2.39 billion in September through the 24th. Money that left is returning through securities accounts.

Second possibility — institutions opened the door. On 9/16, a tokenization company entered US clearinghouse DTCC's fund-settlement network for the first time. On 9/17, the SEC conditionally permitted trading of tokenized shares. If institutional access, rather than rates, is setting the price, prices can rise even as rates rise (our interpretation, unverified).

Some explanations do not fit. "Prices are rising because people distrust the dollar and Treasuries" does not fit the current data well. Over 20 days, gold was almost flat at −0.3% and the dollar rose 0.5%. There is no sign of Korean buying chasing the rally either (kimchi premium (Korean exchange price gap) −0.29%). Nor is leverage excessive: Bitcoin quarterly futures have an annualized premium of 4.5%, and perpetual-futures funding is almost 0.

ONDO stands out among them. Since 9/17, ONDO rose 51% while Bitcoin and Ethereum rose 11%. On 9/24 alone, it jumped more than 20%. That day, tokenization company Ondo launched model portfolios designed by BlackRock. Yet the visible facts do not align.

• Neither the announcement nor the product page mentions the ONDO token. BlackRock limits its role to a one-time provision of the model (Ondo).
• On the night of the jump (9/24, 14:31→23:46 UTC), Ethereum addresses holding ONDO actually fell by 91, from 210,421 to 210,330. There is no sign of an increase in new holders. Most additional trading appears to have occurred within exchange ledgers (our interpretation).
• In ONDO trading across 5 Korean exchanges and Binance, Korea's share grew from 6.8% to 16.3% in the 30 days before the announcement★ (TokenPost).
• A contract holding half the supply releases 125–150 million tokens at intervals of 3 weeks to two months. A new batch of 150 million arrived the day before the announcement.

Why did the token rise so much when nothing was promised to it? Attention borrowed from a name? Buying rights that do not yet exist? A route through Korea? We have not chosen an answer. We are keeping this question open in the crypto observatory (crypto.bobooism.com).

Korea is where money arrives along this chain. Korea's semiconductor export-price index reached 242.8 in August, 181.9% above 1 year earlier (Bank of Korea, contract-currency basis). Exports for September 1–20 totaled USD 71.409 billion, up 78.3%, with semiconductors accounting for about USD 34.1 billion (Korea Customs Service). Delays in AI infrastructure also travel down this route.

Two companies hold up the index. The KOSPI stood at 7,080.92 on 9/23. Samsung Electronics and SK hynix account for 51.1% of its market capitalization. The KOSPI is effectively a window onto memory prices (our interpretation).

Domestic money to support it has thinned. Investor deposits (cash waiting in brokerage accounts) fell from KRW 139.7 trillion on 6/4 to KRW 93.6 trillion on 9/4, then stood at KRW 101.0 trillion on 9/22. The Bank of Korea has been in a tightening phase since 7/16, with its policy rate at 2.75%. Korean retail investors have less cash and a greater interest burden.

Korean markets closed for Chuseok on 9/24·25 and reopen Monday, 9/28. Meanwhile, the US has seen the force-majeure notice, rates at a 19-year high, falling manager stocks and a rising Micron. Monday begins the quarter-end week. Micron reports on 9/30. Korea's two semiconductor companies will receive this news together.

We also return to the questions left by the last report, separating announced facts from forecasts.

Iran's president addresses the UN (9/23). President Pezeshkian explicitly mentioned Hormuz. He criticized the US naval blockade but did not repeat all three conditions reported from the New York meetings—lifting the blockade, frozen assets and ending the war on all fronts—in his speech★. We could not confirm a reference to Bab el-Mandeb (Al Jazeera).

US–China summit (9/24). Treasury Secretary Bessent announced a two-month extension of the trade truce to January 10, 2027. We could not confirm whether the agreement mentioned the strait or sulfuric acid (NBC).

Bank of Japan. Its 1.25% rate, decided on 9/18, took effect on 9/24.

SoftBank bonds. Pricing was set on the evening of 9/23 US time. The total is USD 11.1 billion, payable 9/29. Section 02 gives the terms.

Houthi assessment windows (10/1 and 10/3). Still open. Score them after the windows close, exactly as originally defined, and carry results into the next report.

This report's account is a hypothesis. Any of the following would weaken the interpretation that "money and electricity set the timetable".

• It may be specific to Jupiter. Oracle said the schedule was unchanged and force-majeure notices were common in developments of this scale★ (Oracle vice president, Forbes). If no further delay notices appear at other Stargate sites, the issue narrows to New Mexico permitting.
• Funding may not be blocked. If major cloud companies' new investment-grade bonds sell on favorable terms and managers' shares move with BDCs again, financing channels remain open.
• Demand may outweigh everything. If Micron confirms both prices and volumes on 9/30, the case strengthens that demand sets the pace more than funding costs.
• Managers may be falling for other reasons. Redemption restrictions, fee worries or other factors unrelated to AI may be responsible. We have not separated the causes.
• The oil–rates link is not yet in the data. Until implied inflation rises, section 05's oil story should be read separately from the rates story.

Publication-date values · ④⑥ require human verification of events · No composite score

• 9/28 (Mon): Korean markets reopen. Verification condition: How do Samsung Electronics, SK hynix and foreign-investor flows respond to the two US days (9/24·25)?
• 9/29 (Tue): SoftBank bond payment. Verification condition: Completion of issuance and secondary-market yields.
• 9/29–10/2: quarter-end. Verification condition: Whether SOFR−IORB exceeds +5bp and Fed standing-repo usage exceeds USD 500 million.
• 9/30 (Wed): Micron results. Verification condition: Are both prices and volumes confirmed?
• 10/1 (Thu): OpenAI's 3rd USD 10 billion closing. Verification condition: Completion announcement.
• 10/1 and 10/3: Houthi assessment windows close (#21). Verification condition: Score exactly as originally defined.
• During October. Delay notices at other Stargate sites, Jupiter loan quotes, and divergence between managers and BDCs.
• 10/27~28 FOMC. 11/23 New Mexico fuel-cell air-permit deadline. 2027-02-01 Jupiter pipeline scheduled to start operating.