Oracle Cancels $7 Billion AI Chip Leasing Deal With Tencent After Pressure From US, China
Summary
- Oracle has canceled a $7 billion deal to lease AI chips from its Southeast Asian data centers to Tencent.
- The cancellation is seen as a sign that US and Chinese authorities are pressuring not only direct exports of advanced chips but also their use through overseas infrastructure.
- Chinese companies are also facing limits on securing overseas resources at a time when domestic semiconductors alone are not enough to meet the computing demand needed to train large AI models.
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Oracle has canceled a $7 billion agreement to lease AI chips from its Southeast Asian data centers to China’s Tencent, limiting another path Chinese companies had used to secure computing power by renting advanced chips in third countries.
The Financial Times reported on November 4 that US and Chinese officials separately contacted Oracle and Tencent and urged them to cancel the deal. Under the agreement, Oracle would have provided Tencent with as many as 100,000 AI chips over five years from data centers in Southeast Asia. It was Tencent’s largest overseas AI chip contract.
Chinese technology companies had been renting equipment at overseas data centers after US export controls made it harder to obtain advanced chips. The cancellation underscores pressure from US authorities not only on direct chip exports but also on access through overseas infrastructure.
Nvidia has also asked cloud customers to scale back China-related business, the Financial Times said. Chinese companies are now facing constraints on securing overseas resources as well, as domestically produced semiconductors alone are not enough to meet the computing demand required to train large AI models.
Oracle and Tencent have not issued official statements on the cancellation.
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