According to the _Financial Times_, Blue Owl had been in talks to back a 1-gigawatt data center in Saline Township, Michigan, intended to support OpenAI workloads.
According to the Financial Times, Blue Owl had been in talks to back a 1-gigawatt data center in Saline Township, Michigan, intended to support OpenAI workloads. Those discussions ultimately stalled, with sources citing worries over Oracle’s growing debt load, aggressive AI spending, and the structure of repayment terms. Concerns about potential construction delays linked to local politics were also raised.
Blue Owl confirmed it evaluated the project but chose not to proceed, according to a person familiar with the matter. The firm remains invested in two other Oracle data center projects in the U.S., including major sites in Texas and New Mexico.
Oracle, however, disputed the narrative that the project had lost momentum. In a statement, spokesperson Michael Egbert said the development remains “on schedule” and emphasized that Blue Owl was not selected as the equity partner. “Our development partner, Related Digital, selected the best equity partner from a competitive group of options, which in this instance was not Blue Owl,” Egbert said, adding that final negotiations are progressing as planned.
Related Digital echoed that view, calling reports that Blue Owl “walked away” inaccurate and describing the project as one that attracted “significant interest” from experienced equity partners. Construction is expected to begin in the first quarter of next year, with support from Michigan state officials.
The episode weighed on broader AI-linked stocks, with declines across the sector including Nvidia, AMD, Broadcom, and CoreWeave, as investors reassessed the sustainability of the capital-intensive data center buildout. Analysts have increasingly flagged risks tied to hyperscalers relying on private capital and long-term lease obligations rather than funding projects outright.
The Financial Times also reported that Blackstone is in discussions as a potential replacement financial partner for the Michigan site, though no agreement has been finalized.
Oracle’s balance sheet has become a focal point in the debate. As of late November, the company disclosed $248 billion in long-term lease commitments for data centers and cloud capacity, up nearly 150% from August. The company also raised $18 billion in new debt in September and now carries more than $124 billion in total obligations, including operating leases.
Despite the market reaction, some analysts downplayed the significance of Blue Owl’s exit. Evercore ISI described the situation as a deal-specific decision rather than a broader pullback from digital infrastructure, noting that the asset class remains a core growth area for Blue Owl ahead of a planned new fund in 2026.
Still, Oracle shares remain under pressure, down roughly 50% from their September peak, underscoring how sensitive investors have become to financing risks as AI infrastructure spending accelerates.
Sara Montes de Oca is the Editor in Chief of TechEchelon. Previously a correspondent and producer in Washington, D.C., covering business, finance, and politics.
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