Data center project in Saline hits financing snag
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A rendering of the data center site. Courtesy of Related Digital
The controversial data center project in Saline Township — touted by Gov. Gretchen Whitmer this month as critical to the state's long-term competitiveness — is now reportedly "in limbo."
Why it matters: The $10 billion project about 40 miles west of Detroit is part of ChatGPT creator OpenAI's work with tech giant Oracle to boost computing power for AI.
- New questions about the project reverberated Wednesday on Wall Street amid growing fears of an AI bubble.
Driving the news: The Saline Township project's financing is in doubt after Blue Owl Capital walked away from talks over investing in the data center, the Financial Times reported Wednesday, citing anonymous sources.
- Oracle told Bloomberg that its investment discussions over the data center were "on schedule" but that they did not involve Blue Owl, a major backer of the AI boom.
- Blue Owl was concerned over possible delays and also didn't like the existing lease terms and debt terms, a person familiar with the matter told Axios' Dan Primack.
What they're saying: The FT report was disputed later in the day by a spokesperson for the project's developer, Related Digital.
- The project is moving forward as planned, Related Digital spokesperson Natalie Ravitz wrote in an email to Axios.
- "The notion that Blue Owl walked away is unequivocally false," she wrote. "This is an exceptional project that drew significant interest from equity partners. We evaluated all of our options and selected our equity partner of choice for their unparalleled expertise in the space."
The other side: "It's not surprising that Wall Street is losing faith in a rushed plan to erect a massive data center in Saline Township. We've said all along that this speculative project requires serious scrutiny and public input," said Tim Minotas, legislative and political director for Sierra Club Michigan, in a statement.
- State Rep. Morgan Foreman (D-Pittsfield Township), who represents Saline Township, said in a statement to Axios that potential doubt about the financial health of those building the center is "incredibly troubling" and urged continued scrutiny over the project.
State of play: The massive data center would create more capacity for power-hungry AI systems.
- Related Digital is a subsidiary of Related Companies, the firm founded by Detroit-born billionaire Stephen Ross — though Ross doesn't have formal involvement with Related Digital.
- When announced, construction was expected to start in early 2026.
- Cost estimates have ranged from $7 billion to $10 billion.
Friction point: Residents have protested the data center at the Michigan Capitol, at DTE Energy's Detroit headquarters, and in Saline, per Planet Detroit.
- They rallied for leaders to reject fast-tracked data center contracts, protect utility users and the environment, and ensure there are no "secret deals" between developers and utility companies.
- A resident near the center took her concerns to court.
DTE is seeking speedy Michigan Public Service Commission (MPSC) approval of its contracts to power the data center without official hearings, according to Planet Detroit, and Attorney General Dana Nessel criticized the fast-track process's redacted contracts over a lack of transparency.
- The Sierra Club on Wednesday urged the MPSC to deny the fast-track request.
Whitmer said in written public comment to the commission that data centers are part of America's future and that Michigan can "set an example" for how to build them the right way, protecting the environment and natural resources while also drawing in new jobs and investment.
- Her office on Wednesday referred questions about the project's status to Related Digital.