Oracle Faces Setback as Blue Owl Withdraws from $10 Billion Data Center Project

Oracle's ambitious $10 billion data center project in Saline Township, Michigan, intended to support OpenAI, has encountered a significant setback. Blue Owl Capital, previously a primary financial backer for Oracle's major data center initiatives, has withdrawn from funding the project. The decision follows stalled negotiations, with Blue Owl expressing concerns over less favorable lease terms compared to previous agreements and Oracle's increasing debt levels.

In response, Oracle stated that final negotiations for the project's equity financing are "on schedule" and do not involve Blue Owl. The company emphasized that its development partner, Related Digital, selected an optimal equity partner from a competitive group of options, excluding Blue Owl.

This development has raised questions about the financing of the Michigan facility, as Oracle has not yet secured a new backer. Reports indicate that Blackstone Group has held discussions to step in as a financial partner but has not committed to the investment.

The Michigan data center is part of Oracle's broader "Stargate" initiative, a joint venture with OpenAI and other partners, aiming to invest up to $500 billion in AI infrastructure in the U.S. by 2029.

Following the news, Oracle's stock experienced a decline, reflecting investor concerns over the project's future and the company's financial strategy.