Wall Street witnessed a significant tech-led sell-off on Wednesday, 17th December 2025, after a major setback for software giant Oracle reignited deep-seated concerns about the soaring debt levels in the artificial intelligence sector.
Oracle's Funding Blow Triggers Market Slide
The decline was sparked by a report in the Financial Times revealing that Blue Owl Capital, the primary financial backer for Oracle's data centre ambitions, had withdrawn support for a planned $10bn data centre project in Michigan. This news sent Oracle's shares tumbling by 5.4 per cent to $177.67, extending a painful slide that has seen its value nearly halve since its peak in September.
The reaction was swift and broad across the technology landscape. The tech-heavy Nasdaq Composite index fell 1.8 per cent to close at $22,693.32, marking its lowest level since late November. The broader S&P 500 index also dropped 1.2 per cent to $6,720.95.
AI Valuation Doubts Spread Across the Sector
Analysts identified the Oracle news as a catalyst for a wider reassessment of the high-stakes spending required to build AI infrastructure. Deutsche Bank analysts noted that "doubts about AI valuations were top of mind," with the report heightening fears of a potential bubble in the sector.
The sell-off was not confined to Oracle. Other leading tech stocks suffered heavy losses:
- Chipmaker Nvidia declined 3.81 per cent to $170.94.
- Parent company of Google, Alphabet, saw its shares fall 3.21 per cent to $296.72.
This downturn followed closely on the heels of a significant sell-off just one week prior, when both Oracle and chipmaker Broadcom disappointed investors with their earnings reports.
Global Ripples and a Flight to Safety
The negative sentiment quickly crossed the Pacific. In Thursday's trading session, Asian markets, which are heavily weighted towards technology stocks, followed Wall Street lower. South Korea's Kospi fell 1.53 per cent, while Japan's Nikkei 225 dropped 1.03 per cent.
As investors retreated from tech, they sought refuge in more defensive sectors. Consumer staples and energy emerged as rare bright spots in the S&P 500. Shares in retailers like Costco and Walmart edged higher. Notably, the energy sector gained over two per cent, buoyed by reports that US President Donald Trump planned to order a blockade of sanctioned oil tankers travelling to and from Venezuela.
The day's trading underscored a growing nervousness among investors, who are increasingly questioning the vast sums of debt being accumulated by AI-focused companies to fund their expansive and costly data centre projects.
