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Oracle Corporation (ORCL) shares declined sharply on December 17, 2025, following reports that its largest data center development partner has withdrawn support for a massive artificial intelligence infrastructure project. The Financial Times reported that Blue Owl Capital opted not to back a proposed $10 billion data center in Michigan designed to serve OpenAI, creating uncertainty around Oracle’s aggressive AI expansion strategy.

The news compounds growing Wall Street concerns about Oracle’s rising debt levels and heavy capital expenditures tied to artificial intelligence investments.

Blue Owl Pullback Raises Questions Over AI Data Center Financing
 

According to the Financial Times report, Blue Owl Capital had been negotiating with Oracle and potential lenders regarding an investment in the planned 1-gigawatt facility in Saline Township, Michigan. However, discussions broke down before any agreement was reached, with sources citing concerns about Oracle’s rising debt and massive AI investments as key factors.

Blue Owl has historically played a central role in financing Oracle’s largest U.S. data centers, often retaining ownership of facilities and leasing them back to Oracle under long-term arrangements.

The collapse of negotiations has left Oracle searching for an alternative financial partner to fund the Michigan project, which was designed to provide large-scale computing capacity for artificial intelligence customers, including OpenAI. The proposed data center formed part of Oracle’s broader push to expand its AI-focused infrastructure footprint and compete more directly with larger cloud rivals.

Oracle spokesperson Michael Egbert stated that their development partner, Related Digital, selected a different equity partner and that “final negotiations for their equity deal are moving forward on schedule and according to plan,” directly contradicting the Financial Times report.

This setback follows another recent challenge for Oracle, which last week denied reports of delays to its contractual commitments to OpenAI. The company’s Relative Strength rating plunged to 21 from 80 within a week, according to IBD MarketSurge, reflecting deteriorating market sentiment.

During its most recent earnings call, Oracle management addressed investor concerns about debt requirements, emphasizing the company’s intention to preserve an investment-grade balance sheet despite aggressive data center investments.

Oracle Shares React as Investors Reassess AI Expansion Risks
 

As of 10:18 AM EST on December 17, 2025, Oracle Corporation stock traded at $179.71, down $8.94 or 4.74% from the previous close of $188.65. The stock opened at $183.31 and traded in a range between $179.82 and $184.65 during the session. Trading volume reached 12,887,532 shares, below the average volume of 26,131,577. Oracle’s market capitalization stood at $517.968 billion, with the stock showing a year-to-date return of 9.26%, significantly trailing the S&P 500’s 15.59% gain over the same period.

The company’s financial metrics reveal a trailing P/E ratio of 35.46 and a forward P/E of 27.55, with earnings per share of $5.32. Oracle maintains a profit margin of 25.28% and generated $61.02 billion in revenue over the trailing twelve months.

However, the company’s balance sheet shows concerning leverage, with a total debt-to-equity ratio of 432.51% and negative levered free cash flow of $10.21 billion, highlighting the financial strain from heavy infrastructure investments.

Analyst sentiment has turned cautious, with Goldman Sachs recently lowering its price target from $320 to $220 while maintaining a neutral rating. The average analyst price target stands at $291.11, suggesting potential upside from current levels, though the range spans from $175.14 to $400.00.

The stock has dropped more than 6% in December alone, reflecting growing market skepticism about Oracle’s AI strategy and its ability to manage the financial demands of competing in the rapidly evolving cloud infrastructure market.

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