Oracle shares slide after Blue Owl exits talks on $10B Michigan data center

Oracle watched its stock sink about 6% on Wednesday after news broke that talks with Blue Owl Capital over funding a $10 billion data center in Michigan had collapsed.

The deal was tied to a 1-gigawatt site for OpenAI in Saline Township, but then a report from the Financial Times landed like a hammer with an announcement that it was canceled.

The downturn came at a rough time for a company that is already dealing with heavy debt, rising cloud bills, and a year-long share slide that has pushed the stock about 46% below its peak.

After FT’s report, Oracle pushed back fast and said the project was moving forward and “on schedule,” but made clear that Blue Owl was not included in current equity talks. The company said those talks were running through its development partner, Related Digital, which had chosen another group.

That comment came from Michael Egbert, who said final negotiations were “moving forward on schedule and according to plan.” Oracle did not name the partner selected, but noted Blue Owl was simply not chosen.

Naming new concerns around financing and debt

Blue Owl had played a major role in several earlier Oracle data center projects. Those included a $15 billion site in Abilene, Texas, and an $18 billion site in New Mexico.

This time, the Financial Times reported that people familiar with the situation pointed to concerns about Oracle’s growing debt and the size of its artificial intelligence spending. Those concerns surfaced as the company’s financial filings showed some eye-opening numbers.

Oracle now has $248 billion in lease commitments for data center and cloud capacity over the next 15 to 19 years.

That number, recorded as of Nov. 30, jumped nearly 148% from August. In September, the company raised $18 billion in new debt, according to an SEC filing.

That same month, OpenAI announced a $300 billion partnership with Oracle that would stretch over five years. By the end of November, the company’s debt load reached more than $124 billion, including operating lease liabilities.

Tracking market pressure and watching the S&P 500 fight to hold support

This rough stretch hit while the broader market dealt with its own drama. Jonathan Krinsky, the chief market technician at BTIG, said the S&P 500 was trying to stay above its 50-day moving average of about 6,767.

The index closed Tuesday at 6,800, but touched an intraday low near 6,760. Krinsky said it had been about seven months since the index last closed below that level and warned that failing to make a new high during December trading was a “subtle, but notable change in character.”

The index has still not passed its intraday record of 6,920 from Oct. 29, even though it set new closing highs in December. The recent dip left the benchmark down 0.7% for a month that usually delivers gains.

December normally averages a 1.4% rise, based on data from the Stock Trader’s Almanac, and the so-called Santa Claus rally often gives the last days of December a boost.

Santa might skip this one. The Almanac said the Santa period, which covers the final five trading days of December and the first two of January, usually brings an average 1.2% gain.

Krinsky said a second test of the 50-day average could lead to a sharper slide. The Almanac added that when Santa fails to show, it often comes before bear markets or times when stocks can be bought later at much lower prices.

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