Key Points
- Oracle’s stock dropped 5% after a key partner, Blue Owl Capital, withdrew from a major data center deal.
- The Michigan data center is a $10 billion project and a key part of the “Stargate” AI initiative with OpenAI.
- The news has increased investor concerns about Oracle’s expensive and risky AI strategy.
- Oracle’s stock has fallen about 40% since September, erasing its earlier AI-fueled gains.
Oracle’s stock fell 5% on Wednesday after a report revealed that a key financial partner, Blue Owl Capital, had backed out of a deal to fund a massive new AI data center in Michigan. Oracle quickly sought to reassure investors, stating that the project remains on track and that it is in talks with other partners.
The data center, a critical part of the ambitious “Stargate” AI infrastructure project with OpenAI, is a massive undertaking. Blue Owl, Oracle’s largest data center partner, was in talks to provide the $10 billion required for the Michigan facility, but the negotiations reportedly stalled due to unfavorable financial terms.
This news has intensified investor scrutiny of Oracle’s huge bet on AI. The company’s debt is rising, and its success is increasingly tied to OpenAI, which is itself losing money and has yet to detail how it will fund its trillion-dollar infrastructure plans.
Oracle’s stock has been hammered in recent weeks, falling about 40% since mid-September. The slide erased gains from a rally sparked by the announcement of large cloud orders, most of which were tied to OpenAI.
An Oracle spokesperson confirmed that Blue Owl was not selected as the financial partner for the Michigan project but declined to name the new backer.
However, a separate Financial Times report claimed that Oracle has not yet signed a deal with a new partner, although Blackstone Group has held talks.
