Blue Owl Capital announced it will not pursue the $10 billion data‑center project for Oracle in Michigan, citing unfavorable economics and concerns over Oracle’s debt load and aggressive AI spending.
The decision follows a review of the project’s financial structure and potential construction delays linked to local politics. Blue Owl remains involved in two other Oracle sites, including a $15 billion facility in Texas and an $18 billion facility in New Mexico.
Oracle’s $108 billion debt load and significant AI capital expenditures have raised concerns among lenders, prompting them to demand stricter leasing and debt terms that made the Michigan project less attractive for Blue Owl.
The Michigan project was part of Oracle’s “Stargate” initiative, a joint venture with OpenAI, SoftBank, and MGX aimed at investing up to $500 billion in AI infrastructure in the U.S. by 2029. Oracle’s development partner, Related Digital, has selected Blackstone as a new equity partner for the Michigan site.
Blue Owl’s digital‑infrastructure platform has been a key growth driver, with the firm recently raising $1.7 billion for a dedicated vehicle and maintaining a pipeline exceeding $100 billion. The withdrawal signals a cautious approach to deals involving clients with high debt burdens and aggressive AI spending.
Analyst Glenn Schorr noted that “sometimes not winning is winning,” underscoring Blue Owl’s focus on risk‑adjusted returns. Oracle spokesperson Michael Egbert confirmed that negotiations remain on schedule and that the new equity partner will move forward with the project.
The move represents a significant loss of a major customer opportunity for Blue Owl and highlights the challenges of financing large hyperscaler projects amid tightening credit conditions and shifting market sentiment.
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