Oracle Slides 5% After Report Blue Owl Walks From $10B Data Center Deal

• Oracle (ORCL) shares declined about 5% to $179.27 following reports of stalled negotiations with Blue Owl Capital (OWL) for equity backing of a $10 billion, 1-gigawatt data center in Michigan for OpenAI, though the company disputed the report and affirmed the project is on schedule.
• Concerns over Oracle’s rising debt, including over $124 billion in total obligations and $248 billion in long-term lease commitments as of November 30, contributed to investor unease, with shares down about 46% from their yearly high.
• Blue Owl has backed prior Oracle data center projects valued at $15 billion in Texas and $18 billion in New Mexico, while Blackstone Inc. (BLK) is now in discussions as a potential replacement partner for the Michigan facility.

Oracle Corporation (ORCL) shares fell about 5% to $179.27 on Wednesday after an FT report highlighted challenges in financing a major data center project. The decline underscores broader investor concerns over Oracle’s rising financial commitments in the competitive cloud infrastructure market, especially as the company expands capacity to support artificial intelligence workloads.

The pressure stemmed from indications that negotiations with Blue Owl Capital (OWL) for equity backing of a $10 billion, 1-gigawatt data center facility in Saline Township, Michigan, intended for OpenAI, had stalled. According to FT sources, the impasse reflected concerns over Oracle’s rising debt load and heavy investments in artificial intelligence infrastructure. Oracle quickly countered, insisting the project remains on track. Spokesperson Michael Egbert noted that development partner Related Digital had chosen an alternative equity backer from several competitive options, with final negotiations proceeding as planned.

Blue Owl Capital has previously served as a key investor in Oracle’s domestic data center initiatives, including a $15 billion facility in Abilene, Texas, and another valued at $18 billion in New Mexico. Meanwhile, Blackstone Inc. (BLK) has emerged in discussions as a potential replacement financier for the Michigan project, though no agreement has been finalized.

Oracle’s aggressive expansion in cloud and data center capacity is underscored by its latest quarterly disclosures. As of November 30, the company reported $248 billion in lease commitments for data centers and cloud arrangements, spanning 15 to 19 years, marking a nearly 148% increase from August. This surge aligns with efforts to fulfill large-scale contracts, including a partnership with OpenAI announced in September, valued at $300 billion over five years. In the same month, Oracle issued $18 billion in new debt. By November’s end, total obligations, incorporating operating lease liabilities, exceeded $124 billion.

Despite these capital-intensive moves, which position Oracle to capture growing demand for high-performance computing resources essential for training and deploying advanced AI models, shares have retreated about 46% from their yearly peak, highlighting market sensitivity to leverage risks and execution timelines in the rapidly evolving AI infrastructure landscape.

WallStreetPit does not provide investment advice. All rights reserved.

• Bulenox: Get 45% to 91% OFF ... Use Discount Code: UNO
• Risk Our Money Not Yours | Get 50% to 90% OFF ... Use Discount Code: MMBVBKSM