Shares of Oracle fell sharply on Wednesday after a report raised fresh questions about financing for one of the company’s flagship artificial intelligence infrastructure projects.
Oracle stock dropped more than 1% in premarket trading after the Financial Times reported that Blue Owl Capital would not back a proposed $10 billion data centre deal.
Losses deepened after the company confirmed the news, with the Oracle stock sliding more than 4% in early trading.
The move adds to a prolonged selloff in Oracle shares.
The stock has fallen nearly 40% over the past three months, erasing a significant portion of the gains it recorded earlier after announcing multibillion-dollar computing contracts with high-profile customers, including OpenAI.
Blue Owl steps away from Michigan project
According to the Financial Times, which cited people familiar with the matter, Blue Owl had been in negotiations with Oracle and lenders to invest in a data centre being built in Michigan for OpenAI.
Those talks have since stalled, and the agreement will not move forward, the report said.
As a result, financing for the Michigan project is now uncertain, as Oracle has yet to finalise an agreement with an alternative backer, according to the report.
Oracle responded to the report later on Wednesday, confirming that Blue Owl will not be part of the deal but pushing back on suggestions of disruption.
Oracle said final negotiations on an equity deal for the Michigan data centre project are “on schedule” and that Blue Owl is not involved in the financing.
The company said its development partner, Related Digital, selected “the best equity partner from a competitive group of options,” adding that Blue Owl was not chosen in this instance.
Blue Owl has played a role in financing large-scale data centre projects for technology firms, including Oracle and Meta Platforms, in recent months, making its absence notable for investors closely tracking capital flows into AI infrastructure.
AI spending and febt in the spotlight
The latest developments have intensified scrutiny of Oracle’s aggressive spending on mega-data centres designed to support artificial intelligence workloads.
The company’s rapid expansion has placed it at the centre of a broader debate over whether the AI investment boom risks creating excess capacity.
Investor concerns have grown around the structure and durability of Oracle’s partnership with OpenAI, as well as the sustainability of the wider AI investment cycle.
Those worries have been compounded by rising debt levels and sharply higher capital expenditure commitments.
As a result, pressure has spilt into the credit markets. Oracle’s corporate bonds have come under increased scrutiny as investors search for potential stress points in the AI funding model.
JPMorgan Chase & Co. credit analyst Erica Spear has said pressure on Oracle’s bonds is likely to persist into the new year, reflecting unease about the scale and pace of the company’s investment plans.
Analysts bullish on Oracle
Despite the steep decline in Oracle’s share price, some analysts remain constructive on the stock.
Mizuho reiterated an Outperform rating on Oracle in a research note published Monday, maintaining a $400 price target.
While Mizuho left its fiscal 2026 estimates unchanged, it raised its projections for fiscal 2027. The firm argued that Oracle’s current valuation — about 26 times next twelve months earnings and roughly nine times fiscal 2030 earnings — represents an attractive entry point amid heightened volatility.
Still, Wednesday’s selloff underscores how sensitive Oracle’s shares have become to any signs of uncertainty around financing and execution, particularly as investors reassess the risks embedded in the global rush to build AI infrastructure.
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