Oracle (NYSE:ORCL) shares fell 2.4% in U.S. premarket trading after a Financial Times report said that Blue Owl Capital, Oracle’s largest partner in data center development, has opted not to support a proposed $10 billion data center project in Michigan that was set to serve OpenAI.
According to the report, Blue Owl had been in talks with Oracle and potential lenders regarding an investment in the planned 1-gigawatt facility in Saline Township. However, discussions reportedly broke down before any agreement was reached.
Blue Owl has historically played a central role in financing Oracle’s largest U.S. data centers, often retaining ownership of the facilities and leasing them back to Oracle under long-term arrangements.
The collapse of the negotiations has cast uncertainty over how the Michigan project will be funded, as Oracle is said to still be searching for an alternative financial partner.
The proposed data center was designed to provide large-scale computing capacity for artificial intelligence customers, including OpenAI, and formed part of Oracle’s broader push to expand its AI-focused infrastructure footprint.
The report comes amid growing scrutiny from analysts over Oracle’s increasing debt levels and heavy capital spending tied to artificial intelligence. The company has been investing aggressively in new data centers as it looks to scale AI workloads and compete more directly with larger cloud rivals.
During its most recent earnings call, Oracle management addressed investor concerns about a “~$100B debt requirement,” emphasizing that the company intends to preserve an investment-grade balance sheet.