Oracle $ORCL ( ▼ 5.4% ) shares slid early Wednesday after a Financial Times report said Blue Owl Capital $OWL ( ▼ 2.78% ) will not finance a planned $10 billion, 1 gigawatt Oracle data center in Saline Township, Michigan. The facility is designed to support OpenAI workloads and had been expected to lean heavily on Blue Owl, Oracle’s largest data center funding partner.
The Funding Snag
According to the report, Blue Owl had been in talks with Oracle and lenders to back the Michigan project but ultimately walked away after negotiations stalled. Blue Owl has played a central role in Oracle’s AI infrastructure buildout, typically creating special purpose vehicles that own the data centers and lease them back to Oracle, often layering in billions of dollars of debt financing.
This time, tougher debt terms and concerns about potential construction delays made the deal less attractive, people familiar with the matter told the FT. Blue Owl’s absence leaves Oracle without a named financial backer for the project, at least for now.
Oracle Pushes Back
Oracle moved quickly to downplay the report, telling Bloomberg that negotiations for the Michigan data center are “on schedule” and do not include Blue Owl. The company said its development partner, Related Digital, selected a different equity partner from a competitive process and that final negotiations are moving forward.
Related Digital echoed that sentiment, calling the project “exceptional” and saying it attracted significant interest from potential investors, though it declined to name the chosen partner.
Why Investors Are Nervous
Even with Oracle’s reassurances, the headlines landed poorly. The stock is now down about 15 percent this week and roughly 45 percent from its September peak, wiping out more than $400 billion in market value. Investors are increasingly focused on Oracle’s aggressive AI spending, rising debt load, and growing lease obligations tied to massive data center commitments.
With Oracle planning tens of billions in additional AI infrastructure investment, the Michigan funding hiccup reinforces a broader worry hanging over the stock: whether the company can keep scaling its AI ambitions without stretching its balance sheet too far.