Happy Friday, investors. Bond yields are at their highest since 2007 and the S&P 500 closed flat anyway on Thursday. Durable goods and final Michigan sentiment data is due at 8:30 and 10 AM this morning.

For now, let’s dive into more bubble talk.

One of the hyperscalers funding the AI boom wants the flexibility to delay payments on a $165 billion data center buildout.

Oracle stock fell more than 3% after delivering a force majeure notice to Blue Owl Capital’s development unit that lets it delay payments on New Mexico’s Project Jupiter if the site misses a 2028 opening, according to a report from Bloomberg. 

Oracle says the project remains on schedule. But the company has now generated negative free cash flow for five consecutive quarters, burning $29.1 billion over that stretch as spending on data centers has outpaced the cash generated by its business.

Revenue hit $19.3 billion last quarter, though capital spending of $28.5 billion outpaced the $23.1 billion of operating cash flow.

The New Mexico project has struggled with permits, including an initial rejection — and subsequent denial of a reconsideration request — for state-land access needed by its natural gas pipeline.

Roughly $18 billion of loans tied to the project have also started trading at stressed levels, according to the Financial Times.

Blue Owl, though, said the notice doesn’t change its financial commitments to the project.

Shares of Oracle have fallen by nearly 60% since their peak roughly a year ago, which suggests investors had already priced in significant concerns around the company’s massive spending.

Blue Owl, for its part, has baggage of its own beyond New Mexico. It already pulled out of financing a $10 billion Oracle data center in Michigan last year. 

With Oracle burning cash and Project Jupiter’s loans trading below par, it may no longer be paranoid to turn skeptical on the company and its projects.

We talk about the AI race all the time in this newsletter, and everyone has a different take on whether OpenAI, Anthropic, Google, Meta or even SpaceXAI is in the lead. 

Whatever your favorite AI Lab is, there is a way to invest in it through Harbor Capital Advisors’ AI LabsEcosystem ETF Suite. 

These ETFs allow you to invest in the ecosystem behind the AI Lab you believe in most.

Search Harbor AI Labs ETFs wherever you invest, or follow HarborCapital on X to learn more.*

🛢 The US and Iran are quietly exploring a phased de-escalation deal. Talks would ease pressure on oil markets after Brent cleared $105 a barrel this week, though officials cautioned no formal framework has been finalized. (Bloomberg)

📈 Meta's $14 billion AI bet is starting to pay off. Shares closed up 3.61% at $770.95 on Day 2 of Connect after Zuckerberg unveiled the Muse Charm handheld and a $1,299 VR headset, with KeyBanc lifting its price target to $900. (Yahoo Finance)

🏦 Surging Treasury yields give Kevin Warsh a new problem. The 10-year Treasury cleared 5.16% and the 30-year touched 5.45% this week, complicating the calculus for Warsh as a possible Powell successor. (CNBC)

Warren Pies is the founder of 3Fourteen Research and one of the leading macro and equity strategists in the industry. We sat down to discuss the risks in the macro backdrop, bullish indicators underpinning the AI trade, and his highest-conviction sector calls for 2027.

Tune in on Spotify, Apple Podcasts, or YouTube.

🗓 September 25, 2008: Federal regulators seized Washington Mutual and sold its banking operations to JPMorgan Chase for $1.9 billion.

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*Visit harborcapital.com for a prospectus containing investment objectives, risks, fees, expenses and other important information. Read and consider it carefully before investing. Risks include principal loss and artificial intelligence-related risks. Harbor ETFs are distributed by Foreside Fund Services, LLC.

Harbor is not affiliated with Opening Bell Media, and the funds are not affiliated with, sponsored by, or endorsed by any AI lab.