Oracle Stock Plummets as Blue Owl Walks Away from $10 Billion Michigan Data Center Deal

Oracle's grand data center ambitions just hit a multi-billion-dollar wall. Blue Owl Capital has abruptly exited negotiations for a massive $10 billion project in Michigan, sending Oracle shares into a tailspin. The market's verdict was swift and brutal.

The Deal That Wasn't

Forget the handshakes and press releases. This wasn't a breakdown—it was a full-scale retreat. Blue Owl, a heavyweight in private credit, decided the numbers didn't pencil out. The proposed facility, a cornerstone of Oracle's cloud infrastructure push, now sits in limbo. Investors reacted by dumping shares, a clear signal that faith in near-term execution is fading.

Infrastructure Arms Race Hits a Snag

The cloud war is fought with bricks, mortar, and staggering capital expenditure. Oracle has been on a building spree to catch Amazon, Microsoft, and Google. This Michigan project was a key piece of that puzzle—a $10 billion bet on demand from AI and enterprise workloads. Without it, the growth narrative gets a lot harder to sell. It turns out that writing checks is easy; getting other people to fund them is the real trick.

Finance's Cold Feet

Blue Owl's exit speaks volumes. In the high-stakes game of funding tech infrastructure, even seasoned players get spooked. Was it rising interest costs, concerns over power and cooling for AI, or simply a more attractive opportunity elsewhere? The silence is deafening. It's a classic finance move: talk up the future, but bolt when the present gets too expensive. After all, why risk real money when you can just talk about risk?

Oracle now faces a double-barreled challenge: calming nervous investors and finding a new partner willing to stomach a ten-figure check. In the race for cloud dominance, speed is everything. Today, Oracle wasn't just slowed down—it was left at the starting gate, watching a key financier walk away. The path to cloud relevance just got $10 billion longer.

Naming new concerns around financing and debt

Blue Owl had played a major role in several earlier Oracle data center projects. Those included a $15 billion site in Abilene, Texas, and an $18 billion site in New Mexico.

This time, the Financial Times reported that people familiar with the situation pointed to concerns about Oracle’s growing debt and the size of its artificial intelligence spending. Those concerns surfaced as the company’s financial filings showed some eye-opening numbers.

Oracle now has $248 billion in lease commitments for data center and cloud capacity over the next 15 to 19 years.

That number, recorded as of Nov. 30, jumped nearly 148% from August. In September, the company raised $18 billion in new debt, according to an SEC filing.

That same month, OpenAI announced a $300 billion partnership with Oracle that WOULD stretch over five years. By the end of November, the company’s debt load reached more than $124 billion, including operating lease liabilities.

Tracking market pressure and watching the S&P 500 fight to hold support

This rough stretch hit while the broader market dealt with its own drama. Jonathan Krinsky, the chief market technician at BTIG, said the S&P 500 was trying to stay above its 50-day moving average of about 6,767.

The index closed Tuesday at 6,800, but touched an intraday low NEAR 6,760. Krinsky said it had been about seven months since the index last closed below that level and warned that failing to make a new high during December trading was a “subtle, but notable change in character.”

The index has still not passed its intraday record of 6,920 from Oct. 29, even though it set new closing highs in December. The recent dip left the benchmark down 0.7% for a month that usually delivers gains.

December normally averages a 1.4% rise, based on data from the Stock Trader’s Almanac, and the so-called Santa Claus rally often gives the last days of December a boost.

Santa might skip this one. The Almanac said the Santa period, which covers the final five trading days of December and the first two of January, usually brings an average 1.2% gain.

Krinsky said a second test of the 50-day average could lead to a sharper slide. The Almanac added that when Santa fails to show, it often comes before bear markets or times when stocks can be bought later at much lower prices.

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