Report: Oracle cancels $7B AI chip leasing deal with Tencent after US government pushback
Cloud giant Oracle allegedly scrapped a massive compute rental agreement with Tencent following intervention by the Trump administration, highlighting tightening export control enforcement.
According to a report by the Financial Times, American cloud computing company Oracle has canceled a $7 billion deal to lease artificial intelligence chips to Chinese tech giant Tencent. The decision came after officials from the Trump administration expressed concerns, though neither company has publicly confirmed the details of the transaction or its cancellation.
The proposed deal, orchestrated by Oracle and its chairman Larry Ellison, would have granted Tencent access to up to 100,000 AI chips located in Asia-based data centers over a five-year term. Ordinarily, US export controls bar Tencent from directly purchasing such advanced chips. Leasing capacity from overseas data centers had been viewed as a potential workaround to these restrictions.
Sources familiar with the matter told the Financial Times that Trump administration officials informed Oracle they were worried about the arrangement, given the ongoing winner-takes-all race for AI dominance between the US and China. Consequently, the deal was ultimately scrapped. Separately, the report noted that Chinese government officials had also pressured Tencent to use domestic chips rather than Western counterparts.
This incident underscores the persistent high-pressure stance of the US government regarding the flow of AI hardware to China. While manufacturers like Nvidia are prohibited from selling top-tier training chips directly to Chinese buyers, service providers like Oracle offering 'rental' rather than 'sales' models faced less scrutiny until now. The cancellation signals Washington's intent to close potential regulatory loopholes and prevent Chinese tech firms from accessing critical compute power through third-party infrastructure.