Report triggers selloff across AI-linked stocks
Oracle shares fell 5% on Wednesday after a report suggested that talks with Blue Owl Capital to back a major U.S. data center project had stalled. According to the Financial Times, Blue Owl had been in discussions to help finance a $10 billion, one-gigawatt facility in Michigan intended to support OpenAI workloads.
The report cited concerns over Oracle’s rising debt levels and the scale of its artificial intelligence investments as key factors behind the apparent breakdown. The news weighed on broader sentiment across the AI sector, sending shares of several semiconductor and infrastructure firms lower during the session.
Investor unease over private funding models
The situation has renewed investor scrutiny around how hyperscalers are financing the rapid expansion of data center capacity. Some market participants worry that turning to private equity and long-term lease structures, instead of direct ownership, could create financial strain if AI demand or pricing assumptions change.
A person familiar with Blue Owl’s thinking said the firm stepped back due to unfavorable debt terms, repayment structures, and potential construction delays linked to local political factors in Michigan. Despite this, Blue Owl remains involved in other Oracle-backed data center projects elsewhere in the United States.
Oracle disputes claims of stalled project
Oracle rejected the suggestion that the Michigan development was in trouble. The company said the project remains on track and that Blue Owl was not part of the final equity discussions. Its development partner, Related Digital, confirmed that an alternative equity partner had been selected following a competitive process.
Related Digital added that the site is currently in pre-construction, with work expected to begin in the first quarter of next year, and noted strong backing from state authorities. While reports indicated that Blackstone could potentially replace Blue Owl as a financial partner, no agreement has been finalized.
Debt levels and long-term commitments in focus
Oracle’s aggressive push into cloud and AI infrastructure has come with significant financial commitments. As of late November, the company disclosed nearly $248 billion in data center and cloud capacity lease obligations stretching over the next two decades. It also raised $18 billion in new debt earlier this year.
The company’s balance sheet has become a growing point of debate among investors, particularly after Oracle announced a multiyear, $300 billion partnership with OpenAI. Shares have fallen sharply from their September peak, reflecting rising caution over leverage and the sustainability of large-scale AI infrastructure spending.
