Oracle shares plummet 5.40% pre-market as Blue Owl Capital steps back from $10B Michigan project

Oracle shares plummeted 5.40% in pre-market trading on December 18, 2025, signaling heightened investor anxiety over the company’s ambitious data center projects and financial commitments. The decline came amid reports that Blue Owl Capital, Oracle’s largest U.S. data center partner, had reportedly stepped back from a $10 billion Michigan facility designed to support AI workloads, including capacity linked to OpenAI. While Oracle disputed the claims, stating that negotiations with an alternative equity partner were ongoing, the uncertainty triggered fresh scrutiny over its rising debt and aggressive capital expenditures.

Oracle’s balance sheet has expanded rapidly, with lease obligations for data centers and cloud infrastructure now exceeding $248 billion over 15 to 19 years. Recent debt issuance has further amplified concerns, with total obligations surpassing $124 billion by late November. The company’s cloud revenue has also lagged expectations, compounding worries about its ability to sustain high-growth AI infrastructure spending. Analysts have cut price targets, reflecting cautious sentiment despite long-term optimism about AI demand.

The Michigan project, a 1-gigawatt campus, represents a critical component of Oracle’s strategy to solidify its role in AI infrastructure. However, delays or financing hurdles could disrupt deployment timelines and strain financial flexibility. While Oracle emphasized that final negotiations with a new equity partner remain on track, the market reaction underscores sensitivity to execution risks and leverage concerns. The stock now trades nearly 48% below its 52-week high, reflecting sustained pressure amid evolving capital demands in the AI sector.

Analysts have remained divided on Oracle’s long-term positioning in the AI infrastructure market. Some believe that the company’s vertical integration strategy and direct-to-customer cloud model offer unique advantages, especially as enterprise demand for AI processing grows. Others, however, highlight the risks of underperformance in cloud revenue and the difficulty of maintaining consistent margins in a rapidly evolving, capital-intensive sector. Oracle’s ability to secure alternative financing for the Michigan data center and maintain its competitive edge in cloud computing will likely shape investor sentiment in the months ahead.

With the stock currently trading near multi-year lows and a cloud business still struggling to meet growth targets, Oracle faces a pivotal period in its transformation. The company’s next earnings release and capital deployment strategy will be closely watched as indicators of its ability to manage debt while scaling AI infrastructure. If Oracle can stabilize its cost structure and secure a viable partner for its Michigan facility, the long-term narrative around its cloud ambitions could shift from caution to confidence.