Oracle (ORCL) shares plummeted 5.40% as Blue Owl Capital data center deal collapses.

Oracle (ORCL) shares plummeted 5.4% in pre-market trading on December 18, 2025, as investors reacted to the collapse of a $10 billion data center financing deal with Blue Owl Capital. The partnership, crucial for Oracle’s Michigan project to support AI workloads, stalled after months of negotiations, raising concerns over the company’s ability to secure funding for its aggressive infrastructure expansion. Oracle’s spokesperson denied the reports but confirmed a new equity partner was under consideration, failing to quell market jitters.

The setback exacerbates existing investor anxieties. Oracle’s balance sheet has grown rapidly, with $248 billion in long-term lease commitments and recent debt issuances exceeding $124 billion. Despite maintaining investment-grade bond ratings, the company’s debt instruments now trade at levels akin to junk bonds, while credit default swaps hit 2009-era highs. Analysts highlight the risk of overleveraging as Oracle relies on costly debt to fund AI ambitions, with cash flow struggles and lagging cloud revenue further weighing on confidence.

The Michigan project, a 1-gigawatt facility critical to Oracle’s AI infrastructure strategy, underscores the broader challenge: scaling data centers without commensurate revenue growth. With rivals like Meta and Microsoft facing similar scrutiny over AI spending, Oracle’s stock has fallen nearly 46% from its September peak. The episode signals a shift in market sentiment, as investors demand clearer returns on AI investments and tighter financial discipline from tech firms.

Meanwhile, the market remains skeptical of Oracle’s ability to stabilize its debt and deliver on its AI promises. Recent trading patterns have shown volatility, with short-term traders capitalizing on dips and long-term holders holding for a potential rebound in the company’s execution and revenue model. The lack of clear milestones in Oracle’s AI roadmap and mixed guidance from executives have left analysts split on whether the company can maintain its technological edge while managing its debt burden.