Oracle (ORCL) shares plunged 5% due to an outage at an AI data center in Michigan, dragging down the overall tech sector.

Oracle (ORCL) shares continued to decline, dropping another 5% during Wednesday's trading session. The software company's stock fell because its largest data center partner, Blue Owl Capital, announced it would not support Oracle's next data center project, which involves a $10 billion investment. Previously, Blue Owl had held discussions with lenders and Oracle about investing in a planned 1-gigawatt data center in Saline Township, Michigan, which would serve OpenAI. However, according to the Financial Times, sources revealed that the deal would not move forward as negotiations had reached an impasse.

This deal was originally a good option for Oracle, as it would have helped address some of its debt issues. The company's latest financial report shows that as of the end of November, its net debt was about $105 billion, including lease liabilities, up from nearly $78 billion a year earlier. In addition, Morgan Stanley predicts that this figure will soar to about $290 billion by 2028. In September, Oracle issued $18 billion in bonds and is in talks with several U.S. banks to raise $38 billion in debt financing. However, the failure of this latest $10 billion deal has made Oracle's situation even more difficult and has caused ORCL investors to face a crisis this week.

Over the past five days, Oracle (ORCL) shares have fallen more than 18%, partly due to a disappointing earnings report released on Tuesday. Oracle reported second-quarter revenue of $16.06 billion, up 14% year-over-year, but below the $16.21 billion previously forecast by analysts tracked by Bloomberg. Despite the mixed results, the company's announced AI spending plans have raised concerns among some Wall Street experts.

In fact, Oracle reported second-quarter capital expenditures of $12 billion after the close on Wednesday, up from about $4 billion a year earlier and also higher than the roughly $8 billion previously forecast by analysts tracked by Bloomberg. As a result, Oracle's stock price has fallen more than 40% from its September high, and its bonds have also been sold off.

On Thursday, concerns about increased AI spending also affected other AI-related stocks, with Nvidia (NVDA) and AMD both seeing slight declines. Analysts had viewed Oracle's report as a potential catalyst for a boom-and-bust cycle in AI concept stocks in early 2026. However, as 2025 draws to a close, this report seems to be having the opposite effect.