Oracle’s aggressive push into AI infrastructure has hit a setback after Blue Owl Capital, its largest data-center financing partner, withdrew from a planned $10 billion, 1-gigawatt data center project in Michigan intended to support OpenAI.
According to sources, negotiations broke down over lease structures and rising concerns around Oracle’s leverage and escalating AI-related capital expenditure. Blue Owl reportedly viewed the Michigan project’s lease terms as less attractive than prior Oracle deals it had backed.
The market reaction was swift:
- Oracle shares are down over 15% since last week’s earnings
- Roughly $69 billion in market value erased
- Investors increasingly questioning the return timeline on massive AI capex
The project is part of Oracle’s high-profile “Stargate” AI infrastructure initiative with OpenAI. While Blackstone has reportedly held discussions to step in, no replacement financier has yet committed.
Key takeaway:
The AI infrastructure boom is entering a more disciplined phase. Capital is no longer automatic — financing terms, balance-sheet strength, and long-term cash flow visibility matter more than scale alone.
This episode reinforces a broader market theme:
👉 AI demand remains strong, but funding tolerance is tightening.