Oracle Cancels $7 Billion AI Chip Lease With Tencent Under US Pressure
Oracle scrapped a $7 billion five-year deal to lease about 100,000 AI chips to Tencent after US officials raised concerns, the Financial Times reported.
Oracle Corp. (ORCL) has canceled a chip leasing contract with Tencent Holdings worth an estimated $7 billion after pressure from the Trump administration, the Financial Times reported Wednesday.
The five-year deal, first reported by the FT last month as Tencent's largest overseas lease, would have given the Chinese company access to about 100,000 advanced AI chips across several Oracle data centers in Southeast Asia. Tencent had agreed to pay about 30% of the value upfront. Both Washington and Beijing restrict export of those chips, so Chinese firms have turned to renting computing power abroad.
US officials approached Oracle to raise concerns about the deal, the newspaper said, citing people familiar with the matter. Tencent also received visits from senior officials in Guangdong, where it is based, who urged it to support chips made in China, according to the FT.
Reuters said it could not immediately verify the report. Oracle, Tencent and the White House did not respond to Reuters' requests for comment.
For Oracle, the Tencent contract was one of several large, long-term deals behind its fast build-out of AI cloud capacity. The company recently priced a $20 billion funding round with interest of up to 8.65%, and its shares have roughly halved over the past year as investors weigh AI growth against the cost of paying for it.
Tencent, meanwhile, has been spending more on computing power to catch up with Chinese rivals in AI, and is adding AI agents across its WeChat app, the FT reported in October.
The cancellation follows an FT report on Tuesday that Nvidia told its cloud partners to cap Chinese business at 49% of their capacity. Both moves point to closer US scrutiny of how Chinese firms reach top AI chips through third parties.
Oracle shares were up 5.8% in delayed trading.