Oracle shares fell 5% on Wednesday after reports said that talks with Blue Owl Capital about financing a $10 billion data center in Michigan had stalled. However, Oracle denied the reports and insisted that the project was still going ahead as planned.
According to the Financial Times, Blue Owl Capital was in talks to finance a 1-gigawatt data center facility for OpenAI in Saline Township, Michigan. However, the plan fell through due to concerns about Oracle’s mounting debt and large spending on artificial intelligence.
The concerns come as investors have begun to warn against the rapid pace of data center financing, especially as some hyperscale companies are opting for private equity markets over self-financing. This poses risks in terms of potentially unprofitable lease deals.
In addition to Oracle, other AI companies’ shares were also affected on the same day, with Broadcom down 4%, Nvidia down 3%, AMD down 5%, and CoreWeave down 7%.
The source, who asked not to be named, said Blue Owl pulled out because of unfavourable debt terms and an unsuitable repayment structure. However, Blue Owl is still involved in two other Oracle data centre projects. The source also expressed concerns about local politics in Michigan that could delay construction.
Oracle insisted in an official statement that the data centre project was progressing well and that Blue Owl was not involved in the latest equity talks. Oracle spokesman Michael Egbert said that its development partner, Related Digital, had selected the best equity partner from several candidates, and Blue Owl was not among them. Final negotiations for an equity deal were still on schedule.
Related Digital’s Natalie Ravitz added that the claims that Blue Owl had walked away from the project were untrue and that the project had received strong interest from other equity partners with expertise in the field. Construction of the data centre is expected to begin in the first quarter of next year with the strong support of Michigan Governor Gretchen Whitmer.
The Financial Times also reported that Blackstone is in talks to replace Blue Owl Capital as the financial partner for the data centre project, although no formal agreement has been signed yet.
Blue Owl Capital has previously been a lead investor in several of Oracle’s data center projects in the United States, including a $15 billion center in Abilene, Texas, and an $18 billion site in New Mexico.
According to Evercore ISI analysts, this shows that seasoned investors understand that success does not depend on every deal won. Digital infrastructure remains a key driver of Blue Owl’s growth, with a new $7 billion fund expected to launch in 2026.
Oracle also reported $248 billion in lease commitments for data center and cloud capacity over the next 15 to 19 years, up nearly 148% since August. In September, Oracle issued $18 billion in new debt and announced a $300 billion five-year partnership with OpenAI.
As of the end of November, Oracle’s total debt, including operating lease liabilities, stood at more than $124 billion. Oracle shares are now down about 50% from their high of $345.72 reached in September.
