Oracle says Michigan data center project talks on track without Blue Owl

(Reuters) - Oracle said talks for an equity deal to support its Michigan data center project remain on schedule and do not include Blue Owl Capital, after a report of stalled negotiations with the crucial partner knocked its shares down 5% on Wednesday.

The more than 1-gigawatt project in Saline Township, Michigan, is part of the Stargate AI infrastructure push by Oracle and OpenAI. Oracle said in late October that construction is slated to begin in early 2026.

Blue Owl, Oracle's largest data center partner, had been in talks to back the $10 billion deal but failed to reach agreement on terms that matched those of other projects it had already committed to, a source familiar with the matter said.

Investors have scrutinized Oracle's AI infrastructure build-out in recent weeks as its debt climbs and its fortunes become increasingly tied to OpenAI. The ChatGPT maker, valued at about $500 billion, loses money and has not detailed how it would finance plans to spend more than $1 trillion on infrastructure by 2030.

Oracle shares have fallen about 40% since mid-September, erasing gains from a rally sparked by its announcement of nearly $455 billion in booked cloud orders, most tied to OpenAI.

The stock has fallen 15% since last week's earnings report, which raised concerns about the payoff from its AI push.

"Our development partner, Related Digital, selected the best equity partner from a competitive group of options, which in this instance was not Blue Owl," an Oracle spokesperson said, declining to name the new partner or provide further details.

"We expect full construction to begin in the first quarter 2026 and to deliver the project on schedule," a Related Digital representative said, adding the project drew "significant" interest from equity partners and that the firm evaluated all options.

Oracle has not signed a deal with a new backer, according to the Financial Times, which first reported the development.