Oracle has sought to reassure investors that discussions to secure equity funding for its planned Michigan data centre remain on schedule, even after reports of stalled negotiations triggered a sharp sell-off in its shares. The company clarified that the talks do not involve Blue Owl Capital, countering speculation that difficulties with the investment firm could derail the project.
Oracle’s shares fell about five per cent on Wednesday following reports that negotiations with a key financial partner had faltered, adding to recent pressure on the stock.
A Cornerstone of the Stargate AI Push
The Michigan facility, a more than one-gigawatt data centre planned for Saline Township, is part of the Stargate artificial intelligence infrastructure initiative being developed by Oracle in partnership with OpenAI. The company announced in October that construction is expected to begin in early 2026.
The project, estimated to cost around $10 billion, is seen as a critical component of Oracle’s expanding AI and cloud computing ambitions, particularly as its relationship with OpenAI deepens.
Why Blue Owl Walked Away
Blue Owl Capital, Oracle’s largest data centre partner, had been in discussions to provide equity backing for the Michigan development. However, according to a source familiar with the matter, the firm did not agree to terms that matched those it had secured in other Oracle-backed projects.
The source said existing lease arrangements and debt terms tied to the Michigan project were less favourable than the structures Blue Owl had previously negotiated, ultimately preventing an agreement. The talks were private, and the source requested anonymity.
Oracle Names a Different Direction
Responding to the speculation, an Oracle spokesperson said the company’s development partner, Related Digital, had chosen another equity partner after reviewing multiple options.
“Our development partner selected the best equity partner from a competitive group of options, which in this instance was not Blue Owl,” the spokesperson said, declining to disclose the identity of the new partner or provide further details.
Related Digital also sought to downplay concerns, stating that interest in the project was strong. “We expect full construction to begin in the first quarter of 2026 and to deliver the project on schedule,” a representative said.
Despite these assurances, Oracle has not yet signed a final deal with a new equity backer, according to reports.
Investor Concerns Mount Over AI Spending
The uncertainty comes at a sensitive time for Oracle. Investors have been closely scrutinising the company’s aggressive AI infrastructure expansion as its debt levels rise and its future becomes more closely tied to OpenAI.
OpenAI, the maker of ChatGPT, is currently valued at about $500 billion but continues to operate at a loss. It has also not clearly outlined how it plans to finance ambitions to spend more than $1 trillion on infrastructure by 2030, raising questions about the long-term returns for partners like Oracle.
Oracle’s shares have fallen roughly 40 per cent since mid-September, wiping out gains from a rally that followed its announcement of nearly $455 billion in booked cloud orders, most of which are linked to OpenAI.
Earnings Fallout and Ongoing Talks
The stock has also declined about 15 per cent since Oracle’s most recent earnings report, which intensified concerns about whether its massive AI investments will deliver sufficient returns.
According to the Financial Times, private equity firm Blackstone Group has held discussions as a potential financial partner for the Michigan project but has not yet committed to investing. Blackstone did not immediately respond to requests for comment.
Project Still Moving Forward
Despite the market turbulence and unresolved equity backing, Oracle maintains that the Michigan data centre remains on track. For now, the company is betting that securing the right partner—and delivering the project on schedule—will eventually restore investor confidence in its ambitious AI-driven strategy.