Oracle has reportedly scrapped a roughly $7 billion deal to lease AI chips to Tencent after the Trump administration raised concerns. Neither company has confirmed the cancellation.
Oracle canceled a five-year lease under which Tencent would have rented up to 100,000 advanced AI chips at data centers in Southeast Asia, Financial Times reported, citing two people familiar with the matter. They said the contract died after US officials voiced concerns to Oracle, but the report did not name the officials.
The deal surfaced in early October, with 30% of the value due upfront. Whether Oracle must refund that money is unclear.
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Beijing urged Tencent to seek domestic chips. Nvidia reportedly told cloud providers the day before that non-Chinese clients must account for at least 51% of their capacity. ByteDance and Alibaba keep large leasing deals with US providers, and Oracle is a major ByteDance supplier in Asia.
Related: Oracle Cuts Up to 30,000 Jobs to Fund AI Infrastructure Push
Chinese companies rent overseas computing power to reach chips that US export controls bar them from buying directly. The report called the Oracle lease Tencent’s largest overseas chip rental.
