What is causing investor nerves around Oracle's data center projects?

Investor nerves are heightened due to changes in equity participation and the sheer scale of AI infrastructure financing, creating concerns about counterparty risks.

Why is Blue Owl Capital not contributing equity to the Michigan data center project?

Blue Owl Capital reportedly found the lease and debt terms less attractive for the Michigan project and had concerns about potential delays.

How much is Oracle committed to data center leases for AI infrastructure?

Oracle has committed approximately $150 billion in the three months ending November, with total commitments reaching $248 billion.

Home / Business and Economy / AI Data Center Deal Faces Equity Shake-up

AI Data Center Deal Faces Equity Shake-up

19 Dec, 2025

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Summary

Oracle's Michigan data center project equity participation altered.
Investor nerves surface due to AI infrastructure financing shifts.
Significant hyperscaler commitments create counterparty exposure.

AI Data Center Deal Faces Equity Shake-up

Investor sentiment surrounding AI infrastructure financing experienced a jolt following news that Blue Owl Capital will not provide equity for Oracle's significant Michigan data center project. While Oracle and developer Related Digital assert the project continues as planned, with construction anticipated in the first quarter, the alteration in equity structure led to a notable dip in Oracle's stock and a surge in its debt insurance costs. This situation highlights a broader market anxiety concerning the substantial financial commitments fueling the AI boom.

This Michigan facility is reportedly funded through a debt-heavy model, with approximately 80% from debt, led by a $14 billion package from Bank of America, and the remaining 20% from equity, potentially from Blackstone. Blue Owl's decision, reportedly due to less attractive lease and debt terms and concerns about political factors, contrasts with its involvement in Oracle's New Mexico project. The market's reaction emphasizes increasing awareness of the risks associated with large, off-balance-sheet hyperscaler commitments.