Oracle Shares Slide After Reported Financing Snag on $10 Billion Michigan Data Center

Oracle Corp. shares declined roughly 5% on Wednesday after a Financial Times report indicated that talks with Blue Owl Capital to finance a planned $10 billion data-center project in Saline Township, Michigan, had stalled. The story said Blue Owl grew wary of Oracle’s mounting debt and aggressive spending on artificial-intelligence infrastructure, prompting the private-equity firm to step back from the proposed 1-gigawatt facility earmarked for use by OpenAI.

Conflicting Accounts of Financing Progress

A person familiar with Blue Owl’s deliberations said the investor examined the Michigan deal but withdrew over what the individual described as unfavorable debt terms and repayment structures. The same person added that concerns about potential construction delays tied to local political issues also weighed on the decision. Despite exiting the project, Blue Owl remains involved in two other Oracle data-center developments, one in Abilene, Texas, valued at approximately $15 billion, and another in New Mexico estimated at $18 billion.

Oracle disputed the notion that momentum on the Michigan build has slowed. Company spokesperson Michael Egbert said the development partnership, led by Related Digital, selected a different equity backer through a competitive process and that negotiations “are moving forward on schedule.” Related Digital spokesperson Natalie Ravitz likewise rejected any suggestion that Blue Owl “walked away,” stating that the chosen investor possesses “unparalleled expertise” in large-scale digital infrastructure. Neither Oracle nor Related Digital identified the replacement partner, though the FT reported that Blackstone is in discussions to assume the financing role. No agreement has been executed.

Broader Market Reaction

The uncertainty surrounding the project coincided with declines across several high-profile semiconductor and AI-infrastructure companies. Broadcom fell about 5%, Nvidia slipped 3%, Advanced Micro Devices lost 4%, and cloud-computing provider CoreWeave dropped 5% during Wednesday’s session. Market analysts have pointed to growing investor unease over how hyperscale operators intend to fund the wave of multibillion-dollar data centers needed to meet surging AI demand, especially when private equity replaces traditional corporate balance-sheet funding.

Project Timeline and Political Support

Oracle plans to begin construction on the Saline Township site in the first quarter of next year. According to Related Digital, the facility is in pre-construction and has secured “strong support” from Michigan Governor Gretchen Whitmer. The 1-gigawatt capacity would make the complex one of the largest single data centers in the United States, aligning with Oracle’s strategy to expand cloud services used by OpenAI under a previously announced multi-year arrangement.

Debt Load and Capital Commitments

The skepticism reportedly expressed by Blue Owl centers on Oracle’s growing financial obligations. The company recorded $248 billion in long-term lease and cloud-capacity commitments as of Nov. 30, representing a 148% jump since August. In September, Oracle issued $18 billion in new debt, and by the end of November its total liabilities, including operating leases, exceeded $124 billion.

Oracle’s heightened spending reflects its attempt to compete aggressively in cloud and AI markets. In September, OpenAI announced a partnership projected to be worth $300 billion over five years, with Oracle providing cloud infrastructure to the artificial-intelligence developer. Details of how that arrangement is financed have not been disclosed.

Imagem: Internet

Blue Owl, meanwhile, has positioned digital infrastructure as a key growth area. Brokerage Evercore ISI described the Michigan decision as an instance where “the deal simply wasn’t the right one,” noting that Blue Owl continues to raise capital for the sector, including a $7 billion fund launched in May and an additional fund planned for 2026.

Stock Performance

Oracle shares have fallen about 50% from the record high of $345.72 reached in September. Wednesday’s pullback followed a broader sell-off in technology shares but was sharper than the declines in some peers. Investors continue to monitor the company’s ability to balance the cost of scaling its cloud platform with the need to manage leverage.

More information on Oracle’s debt issuance and lease obligations can be found in the company’s latest filing with the U.S. Securities and Exchange Commission.

Crédito da imagem: Financial Times