Oracle Cancels a $7B AI Chip Leasing Deal With Tencent After US Pressure, According to the FT
ORACLE CANCELS $7B CHIP LEASING DEAL WITH TENCENT: FT things starting to move
Context
If confirmed, the cancellation shows Washington is now policing not just chip sales to China but also access to US owned AI compute abroad, which could close a route Chinese firms used to reach advanced chips.
US export rules limit sales of the most advanced AI chips to China, but Chinese companies have rented computing power in data centers outside China. Oracle is one of the largest US cloud providers. Earlier in the Nov 3 deck, Watcher.Guru reported that Nvidia told partners to cut China business.
Deep dive
Zerohedge (@zerohedge) posted shortly after midnight ET on Nov 4 that Oracle canceled a $7B chip leasing deal with Tencent, citing the Financial Times, and added that things are starting to move.
According to summaries of the FT report posted by Wall St Engine (@wallstengine) and others, the canceled agreement was a five year deal that would have given Tencent access to as many as 100,000 advanced AI chips across Oracle data centers in Southeast Asia. The same summaries say Oracle dropped it after pressure from the Trump administration. CNBC TV18 also posted a headline, citing a report, saying Oracle scrapped the deal after US pressure.
These details come from posts relaying the FT, not from Oracle or Tencent statements, and the full FT report was not reviewed here. Neither company had commented in the posts found during this scan.
The report matters because renting compute abroad has been one of the ways Chinese technology companies could use advanced AI chips without buying them directly. A $7B, 100,000 chip arrangement would be one of the larger known deals of that kind.
The zerohedge post passed 440,000 views overnight, while US attention was largely on election results. It follows other China related chip news this week, including a Nov 3 report that Nvidia told partners to cut China business.
What to expect next
Watch for statements from Oracle, Tencent or the US Commerce Department confirming or explaining the cancellation. Investors will look for any impact on Oracle's cloud backlog. A key open question is whether US officials will press other cloud providers to limit compute rentals to Chinese companies in third countries, and how Beijing responds. Chinese cloud users and the chip suppliers behind these deals will also be watching closely.