Oracle shares plunge 5.40% as Blue Owl exits Michigan data center financing

Oracle shares plunged 5.40% in pre-market trading on December 18, 2025, extending a week of volatility amid growing concerns over its financial strategy.

Investors reacted to news that Oracle lost a key financing partner, Blue Owl Capital, for its $10 billion Michigan data center project. The development intensified fears about the company’s ability to secure funding for its AI infrastructure expansion, with analysts noting that Oracle’s bonds now trade at levels akin to junk despite retaining investment-grade ratings. Credit default swaps for Oracle hit multi-decade highs, reflecting heightened default risk perceptions.

Oracle and its development partner, Related Digital, denied reports that Blue Owl withdrew from talks, stating negotiations remain on track. However, the lack of a publicly confirmed funding source has fueled skepticism about Oracle’s leverage-heavy approach to funding AI growth. The sell-off spilled over into broader tech markets, with AI-linked stocks like Broadcom and Arm Holdings also declining sharply, underscoring sector-wide caution.

Analysts are now scrutinizing Oracle’s debt structure, pointing to its high leverage and limited flexibility in a potential interest rate environment shift. The company’s aggressive capital deployment in AI infrastructure has raised questions about return-on-investment and long-term sustainability. While Oracle has yet to issue a concrete update on the data center financing, the stock’s recent performance suggests that the market is losing patience with its opaque funding strategy.