Blue Owl Capital‘s (NYSE:OWL) decision to step away from financing an Oracle-backed (NYSE:ORCL) AI data center has become a fresh flashpoint for investors already on edge about the financial architecture behind the AI infrastructure boom.
The private capital firm had been in discussions with Oracle and lenders about investing in a planned $10 billion, 1-gigawatt data center in Saline Township, Michigan, designed to serve OpenAI. Talks ultimately stalled, leaving Oracle without a confirmed equity partner for the site, according to a Financial Times report on Wednesday. Oracle has said it remains in late-stage talks with another investor.
The setback has landed at a fragile moment for AI-linked stocks. Oracle, Broadcom (NASDAQ:AVGO), CoreWeave (NASDAQ:CRWV), and other nuclear stocks have all sold off sharply in recent sessions, as investors reassess whether massive AI infrastructure spending will deliver returns in tandem with the capital being deployed.
Check the current price of ORCL here.
Why This Deal Matters
Blue Owl has been Oracle’s primary data center financing partner, backing multibillion-dollar projects through special-purpose vehicles that own the facilities and lease them back to Oracle under long-term agreements. Those sites, in turn, supply computing power to AI developers such as OpenAI.
That model — capital funded by private investors, leased, and supported by long-dated AI contracts — has been central to the rapid expansion of AI capacity. It has also drawn increasing scrutiny as the same small group of players acts as customer, financier and growth sponsor across the ecosystem.
Japanese conglomerate SoftBank‘s role as a major backer of OpenAI and AI infrastructure has further tightened those links, reinforcing concerns among investors that cash flows and commitments may be more circular than they appear on the surface.
Debt, Deadlines, And Shifting Terms
Oracle’s AI push has been financed largely through debt and long-term leases. The company disclosed that capital spending will rise to $50 billion this fiscal year, while total lease commitments surged to $248 billion in the three months through November, with obligations stretching up to two decades. The company has been snapping up deals with tech giants like Meta (NASDAQ:META) and Nvidia (NASDAQ:NVDA).
According to FT, people familiar with the Michigan negotiations said lenders pushed for stricter leasing and debt terms as sentiment around large-scale AI spending shifted, making the economics less attractive than earlier projects. Blue Owl was also wary of potential construction delays at the site.
And, the reassessment is not limited to Oracle. CoreWeave, a fast-growing AI compute provider with significant exposure to OpenAI, has been repeatedly cited by market participants as facing similar risks tied to leverage, heavy capital expenditure, and customer concentration. Its shares are now down more than 60% from their June highs.
See also: CoreWeave Stock Slides As AI Concerns Rise: What’s Happening?
Repricing, Not A Collapse Call
Still, there is no indication that AI demand from OpenAI or hyperscalers is slowing.
But Blue Owl’s withdrawal has likely sharpened a broader reassessment underway in markets. Investors who once rewarded speed and scale are now asking harder questions about funding durability, cash flow visibility, and who ultimately bears the risk if AI growth fails to meet expectations.
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