Oracle stock plummets on report that Blue Owl won’t back $10 billion data center

oracle Shares fell about 4% on Wednesday following reports that talks had been held. blue owl capital Plans to back a $10 billion data center in Michigan had stalled, but the cloud company later disputed the report.

According to the Financial Times, Blue Owl was in talks with Oracle about funding a 1-gigawatt facility for OpenAI in Saline Township, Michigan.

But the plan fell through due to concerns about Oracle’s rising debt levels and widespread spending on artificial intelligence, the FT reported, citing people familiar with the matter.

The cloud company later said the project was progressing “on schedule” but that Blue Owl was not included in the stock talks.

“Our development partner, Related Digital, selected the best equity partner from a group of competitive options, and in this case, it was not Blue Owl. Final negotiations for the equity transaction are proceeding as scheduled and according to plan,” Oracle spokesperson Michael Egbert said in a statement.

Blue Owl Capital and FT did not immediately respond to CNBC’s requests for comment.

According to the FT, Blackstone is in talks to potentially replace Blue Owl Capital as the data center’s financial partner, but no deal has been signed yet.

According to the FT, Blue Owl Capital is a major investor in Oracle’s data center projects in the US, including a $15 billion center in Abilene, Texas.

The cloud computing giant said in its latest quarterly report that as of Nov. 30, it had $248 billion in data center leases and cloud capacity contracts over the next 15 to 19 years. This is an increase of almost 148% from August.

Oracle raised $18 billion in new debt in September, according to SEC filings. That same month, OpenAI announced a $300 billion partnership with Oracle over the next five years.

By the end of November, the company had more than $124 billion in debt, including operating lease debt, according to filings.

Oracle stock is down about 46% from this year’s high.

Read the full article on FT here.