TLDR:
- Oracle’s stock drops 5.4% after Blue Owl exits $10B project.
- $10B data center in Michigan delayed as Blue Owl pulls out.
- Oracle faces rising debt and AI investment challenges.
- Blue Owl’s withdrawal raises concerns about Oracle’s future.
- Oracle insists $10B project moves forward despite setbacks.
Oracle Corporation(ORCL) stock dropped 5.40%, closing at $178.46 on Wednesday.
Oracle Corporation, ORCL
The decline followed reports of stalled discussions with Blue Owl Capital over a $10 billion data center project. The project, intended to support AI operations, was supposed to be built in Michigan but now faces delays.
Blue Owl Pulls Out of Investment Deal
Blue Owl Capital, Oracle’s largest data center partner, decided to withdraw from the planned $10 billion facility in Saline Township, Michigan. According to reports, the decision came after concerns arose over Oracle’s increasing debt and its significant investments in artificial intelligence infrastructure. The proposed data center, designed to serve OpenAI and other AI companies, was crucial for Oracle’s cloud strategy.
Oracle disputed the report, stating that the project is moving forward as planned. The company clarified that its development partner, Related Digital, chose another equity partner from a competitive group of options. Oracle insisted that negotiations for the project are still on track and that Blue Owl was never part of the equity talks.
Concerns Over Rising Debt and Data Center Costs
Oracle’s substantial debt levels have raised alarms in recent months. The company’s latest filings reveal $248 billion in lease commitments for data centers over the next 15 to 19 years. These rising liabilities, along with increasing artificial intelligence-related expenses, have raised questions about Oracle’s long-term financial stability.
Oracle has emphasized its intention to maintain an investment-grade balance sheet. The company’s management remains confident that its investments in AI and data infrastructure will pay off in the long term. Analysts remain skeptical about the sustainability of these massive commitments, especially as competition in the AI and cloud sectors intensifies.
Despite the setbacks with Blue Owl, Oracle continues to push forward with its data center expansion plans. The company is in talks with other equity partners to fund its Michigan project. Oracle’s focus on cloud services and AI infrastructure remains unwavering, even as it navigates challenges from both financial and market pressures.
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
