(investomania) - Oracle (NYSE: ORCL) shares fell nearly 6% on Wednesday, adding to a rough month for the software giant as investor nerves over debt and AI spending intensified.
The Financial Times reported that private lender Blue Owl Capital would not back Oracle’s planned $10 billion data centre in Michigan, leaving questions over how the project will be funded.
Blue Owl has been Oracle’s biggest partner in data centre ventures, including deals in Texas and New Mexico, and it has also backed Meta’s Louisiana facility. Negotiations with Oracle had been ongoing but stalled, according to the report.
Oracle said its partner, Related Digital, “selected the best equity partner from a competitive group of options, which in this instance was not Blue Owl,” making clear the project is not dead but signalling funding is more complicated than investors expected.
The story feeds into broader concerns about how tech companies are financing their AI expansions.
Special arrangements, like off-balance-sheet debt through joint ventures or special purpose vehicles, have become common. Add to that the surge in corporate bond issuance this year, and some investors are wondering if the AI build-out is being funded responsibly. Oracle, lacking the strong internal cash flow of its Big Tech peers, is now under particular scrutiny.
The drop on Wednesday leaves Oracle down nearly 19% for December. Last week’s earnings only added to worries, costs rose faster than expected, cash burn exceeded forecasts, and a $248 billion lease obligation disclosed in the quarterly SEC filing highlighted the company’s mounting commitments.
Investors have also been unsettled by Oracle’s reliance on OpenAI to hit ambitious revenue targets, a dependence that has heightened risk perceptions.
Oracle executives insist the company will maintain its investment-grade BBB credit rating, but the market remains cautious. Credit default swap spreads hit their highest level since 2009, signalling that some investors are bracing for trouble even as the company moves forward with its AI ambitions.
By Mark Rogers
December 17, 2025
