Oracle clarifies Michigan data center funding talks amid investor jitters

Company says equity discussions for its planned Michigan hyperscale facility remain on track, even as Blue Owl Capital exits negotiations and concerns mount over Oracle’s rising debt and growing reliance on AI-led infrastructure expansion.

Oracle has reportedly sought to reassure investors that funding discussions for its planned hyperscale data center project in Michigan are progressing as planned, despite reports suggesting stalled negotiations with a key financial partner that triggered a sharp fall in its share price.

The proposed facility, located in Saline Township and designed to exceed one gigawatt of capacity, forms part of the broader Stargate AI infrastructure initiative led by Oracle in collaboration with OpenAI. The company has said construction is expected to begin in early 2026, positioning the site as a major pillar of its long-term AI and cloud expansion strategy.

Blue Owl steps aside from deal

Oracle confirmed that while discussions for an equity partner are ongoing, they do not include Blue Owl Capital, its largest data center investment partner to date. According to sources familiar with the talks, Blue Owl opted out after failing to agree on terms comparable to those it had secured in previous Oracle-backed projects. Existing lease structures and debt arrangements linked to the Michigan site were reportedly less attractive than those in earlier deals.

An Oracle spokesperson said the company’s development partner, Related Digital, selected an equity investor from a competitive field, adding that Blue Owl was not chosen in this instance. Related Digital separately stated that the project has attracted strong interest from multiple potential backers and remains on schedule for construction to begin in the first quarter of 2026.

Market scrutiny intensifies

The development comes amid heightened investor scrutiny of Oracle’s aggressive AI infrastructure push. The company’s debt levels have risen steadily, while its growth prospects are increasingly tied to OpenAI, which continues to operate at a loss even as it pursues ambitious infrastructure investments.

Oracle’s shares have fallen sharply in recent months, erasing gains from an earlier rally driven by large cloud order bookings linked to AI workloads. While reports suggest other financial groups, including Blackstone, have held preliminary discussions, Oracle has yet to finalise an equity agreement for the Michigan project, leaving markets closely watching its next move.