Oracle stock dropped about 5% Wednesday after a report suggested Blue Owl Capital had backed away from funding a massive $10 billion data center tied to OpenAI.

Oracle says the project is still on track. Blue Owl says it simply wasn’t the right deal. Investors heard something else entirely. They heard leverage.

According to reports, Blue Owl had been in talks to back a 1-gigawatt data center in Michigan (one of the largest AI-focused facilities ever proposed) before concerns over Oracle’s rising debt load, repayment structure, and increased AI spending caused the discussions to stall.

That alone was enough to rattle the market. But the real anxiety sits deeper than a single project.

Oracle is now sitting on $248 billion in data-center and cloud lease commitments stretching 15 to 19 years into the future… a number that’s up nearly 148% since August. At the same time, the company raised $18 billion in new debt in September, pushing total obligations (including operating leases) north of $124 billion by the end of November.

This is what happens when the AI arms race collides with old-fashioned balance sheets.

Data centers used to be slow, owned assets. Now they’re fast, financed ones… built with private capital and locked into long-term commitments that behave like debt, even when they don’t show up that way at first glance.

That’s where investor nerves start to twitch.

With that said, Blue Owl didn’t walk away from Oracle entirely. It remains involved in two other Oracle sites and is still positioning digital infrastructure as a core growth business. But the Michigan project raised enough red flags that it didn’t make the cut.

Oracle, for its part, pushed back hard. The company says the project remains “on schedule,” that Blue Owl was never part of final equity talks, and that a different partner has already been selected. Related Digital, Oracle’s development partner, echoed that message, calling the idea of a walk-away “unequivocally false” and noting strong support from Michigan’s governor.

Behind the scenes, Blackstone is said to be in talks to step in, but nothing’s been finalized. The market, meanwhile, isn’t waiting around for clarity… it’s reacting to what this all signals. And the signal here is that the AI build-out is starting to meet capital constraints.

Oracle wasn’t alone in Wednesday’s selloff. Broadcom fell roughly 5%. Nvidia slid 3%. AMD dropped about 4%. CoreWeave fell as well. When one pillar of the AI infrastructure stack wobbles, the rest tend to feel it.

That said, none of this means the AI boom is over. Demand for compute isn’t slowing. OpenAI’s $300 billion partnership with Oracle is very real and construction on the Michigan site is still expected to begin next year. 

But it does suggest the market is starting to ask more questions. And that’s one of the reasons Oracle shares are now down roughly 50% from their September highs.

At the time of publishing this article, Stocks.News doesn’t hold positions in companies mentioned in the article.