Oracle denies funding crisis after Blue Owl exits USD 10 billion project

Oracle stock prices saw a sharp dip on Wednesday as Blue Owl Capital pulls out USD 10 billion investment out of Oracle’s Michigan data centre project. Although, Oracle has confirmed on 17 December 2025, that its USD 10 billion data centre project in Saline Township, Michigan remains on schedule despite the withdrawal of its primary financial partner, Blue Owl Capital.

The announcement came after a report by the Financial Times that suggested the 1 gigawatt project was in limbo, causing Oracle’s stock to drop 5% and wiping out billions in market value.

Blue Owl Capital, which has previously funded major Oracle sites in Texas and New Mexico decided not to pursue this equity deal. According to multiple media reports, Blue Owl viewed the debt and lease terms for the Michigan site as less favorable than its earlier projects.

Additionally, the firm reportedly haboured concerns regarding local political opposition in Saline Township and potential construction delays that could jeopardise the aggressive delivery timeline.

What is “The Barn” project?

The Michigan facility, known as “The Barn”, sits on 250-acre site. It is a critical component of Oracle’s “Satargate” intiative, a joint effort with OpenAI and SoftBank to build massive AI infrastructure. The design includes three single-story buildings, each spanning 550,000 square feet, and uses a closed-loop cooling system to minimise water consumption. Once operational, the campus is supposed to provide the immense computing power required to train and run OpenAI’s next-generation models.

Oracle spokesperson Michael Egbert disputed claims of a financing crisis. He stated that the project developer, Related Digital, selected a different equity partner from a competitive group. While Oracle declined to name the new investor, reports suggest that Blackstone has hold preliminary discussions about stepping in to fill the funding gap, but no official announcement has been made so far on the agreement.

The financial scrutiny

Investor scrutiny has intensified following Oracle’s latest 10-Q filing, which disclosed USD 248 billion in lease commitments, a 148% increase from just three months prior. Oracle’s net debt reached USD 105 billion at the end of November 2025. This heavy reliance on debt to fund infrastructure has led to a surge in the cost of insuring Oracle’s debt against default, with credit-default swap spreads reaching their highest levels since the 2008 financial crisis.

Despite the financial pressure, Oracle and its partners insist the Michigan project will break ground in early 2026. The company maintains that its shift toward a model where it leases facilities rather than owning them allows it to scale faster than its competitors. However, the exit of its most reliable financial backer underscores the rising challenges of funding the physical backbone of the artificial intelligence industry.