Blue Owl is not planning to provide financial backing to Oracle’s $10 billion data center in Saline Township, Michigan. The data center project is being developed by Oracle, Related Digital, and OpenAI as part of the latter’s Stargate project. The campus is expected to have an IT capacity of 1GW located on a 250-acre site known as The Barn. Furthermore, it will consist of three 550,000 sq. ft. (51,097 sq. m) single-story buildings.
Reportedly, the project is also expected to use a closed-loop cooling system to reduce water use. Construction is currently set to start in early 2026, though the project has faced some pushback from local residents. The blow is dealt harder with Oracle’s biggest partner, Blue Owl, has declined to back the project. Citing three people familiar with the matter, the Financial Times reports that Blue Owl was in discussion with lenders and Oracle about investing in the data center project. However, negotiations stalled and Blue Owl will no longer be involved. Earlier in September, OpenAI, Oracle, and SoftBank unveiled five new U.S. data center sites under “Stargate,” the $500 billion AI infrastructure platform. It brings the initiative’s planned capacity to nearly 7 gigawatts and more than $400 billion of committed investment.
Reason for the Setback on Oracle’s Data Center in Michigan
One of the major reasons that faltered conversations on Oracle’s data center in Michigan is the debt that the company has. Sources told FT that the lenders were pushing for stricter leasing and debt terms due to “shifting market sentiment” about the massive spending on AI infrastructure. Furthermore, there are also concerns about Oracle’s growing debt. At the end of November, Oracle had some $105bn in debt, up nearly $78bn from the year prior. In September, the company was reportedly seeking a debt package of around $38bn. They also sold some $18 billion in bonds that same month.
KeyBanc Capital Markets estimates that Oracle may need to borrow up to $100bn to fund the buildout. Blackstone has reportedly stepped in and is now in discussions to be a financial partner for the project. However, they have not yet signed a deal. Neither Blue Owl nor Blackstone was willing to provide a comment to the FT. Oracle, however, told the publication: “Our development partner, Related Digital, selected the best equity partner from a competitive group of options, which in this instance was not Blue Owl… Final negotiations for their equity deal are moving forward on schedule and according to plan.” Blue Owl has previously backed the Crusoe data center campus in Abilene, Texas, which is being leased to Oracle.
Project Factsheet
- Project Name: Stargate Data Center Campus (The Barn)
• Lead Developer: Oracle
• Partners: Related Digital, OpenAI
• Location: Saline Township, Michigan, USA
• Site Size: 250 acres - Project Value: $10 billion
• Planned IT Capacity: 1 GW
• Data Center Design:
– Three single-story buildings
– Each 550,000 sq. ft. (51,100 sq. m)
– Total campus-scale hyperscale facility - Cooling System:
– Closed-loop cooling design
– Intended to reduce water consumption - Construction Timeline:
– Expected Start: Early 2026
– Status: Pre-construction / Financing stage - Financing Setback:
– Blue Owl Capital: Withdrew from funding discussions
– Reason: Stricter debt and leasing terms amid shifting AI infrastructure market sentiment
– Oracle Debt Level: $105 billion as of November - Funding Outlook:
– Oracle reportedly seeking large-scale debt financing
– Blackstone: In discussions as potential equity partner (no deal finalized) - Strategic Context:
– Part of OpenAI’s Stargate AI infrastructure initiative
– One of the largest planned AI-focused data center campuses in the U.S.
– Project has faced local community opposition alongside financing challenges
