Oracle shares took a 6% hit on Wednesday following reports that a major funding deal for a new data center had fallen apart. The Financial Times originally broke the news, stating that negotiations between Oracle and investment firm Blue Owl Capital regarding a $10 billion facility in Michigan had stalled.
According to the report, Blue Owl backed away because they worried about Oracle’s massive spending on artificial intelligence and its mounting debt. The Michigan project is a critical piece of infrastructure intended to support OpenAI’s computing needs.
Oracle, however, quickly pushed back against the narrative. The company insists the project in Saline Township is moving forward exactly as planned. A spokesperson clarified that, while they spoke with Blue Owl, their development partner, Related Digital chose a different financial backer from a group of competitive options. “Final negotiations for their equity deal are moving forward on schedule,” the representative stated. Reports now suggest that investment giant Blackstone might step in to fill the void, though no official contract has been signed.
The split is significant because Blue Owl has been Oracle’s primary wallet for recent expansion, funding massive sites in Texas and New Mexico. Losing them on this Deal made investors nervous, specifically regarding Oracle’s financial health.
The numbers show why the market is jittery. Oracle is betting everything on cloud capacity. As of late November, the company has committed to paying a staggering $248 billion in leases over the next two decades—a figure that jumped nearly 148% since August. Just in September, Oracle raised another $18 billion in debt. With total obligations now topping $124 billion and confusion swirling around its funding partners, Wall Street is punishing the stock. Oracle shares have now dropped roughly 46% from their year-high.
