Oracle's latest mega–data center project is moving ahead in Michigan—but without its usual financial backer. The Financial Times, citing people familiar with the talks, reports that private capital firm Blue Owl Capital, Oracle's biggest partner on US data center builds, has walked away from a planned financing package of up to $10 billion for a 1-gigawatt facility in Saline Township that's meant to power OpenAI. Negotiations with lenders bogged down as they pushed for tougher lease and debt terms amid mounting worries over the scale and cost of AI infrastructure, the sources said, leaving the deal less attractive for Blue Owl than prior projects.
The setback comes as Oracle leans heavily on borrowing to fund an aggressive buildout of AI-focused capacity. The company's net debt, including lease obligations, has climbed to around $105 billion, up from roughly $78 billion a year earlier, and Morgan Stanley projects it could swell to about $290 billion by 2028. Oracle has already sold $18 billion in bonds this year and is in talks to raise another $38 billion. Its stock is down more than 40% from its September high, and rating agencies and analysts have flagged the rising leverage.
Oracle's stock fell another 5% Wednesday after the FT report, which the company disputed, CNBC reports. "Our development partner, Related Digital, selected the best equity partner from a competitive group of options, which in this instance was not Blue Owl," Oracle spokesperson Michael Egbert said. "Final negotiations for their equity deal are moving forward on schedule and according to plan." The Saline Township build, part of a $300 billion agreement to supply OpenAI with 4.5 gigawatts of computing power over five years, has already faced local zoning battles and could still encounter construction delays—another factor that concerned Blue Owl, according to the FT's sources.
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