Oracle has scrapped a multibillion-dollar chip leasing contract with Tencent after bowing to pressure from the Trump administration, in a sign of rising tensions for US cloud providers serving Chinese AI companies. The Californian group led by billionaire Trump backer Larry Ellison signed a five-year lease with the leading Chinese tech giant to provide access to as many as 100,000 advanced AI chips across a host of data centres in south-east Asia. The contract, worth an estimated $7bn and first reported by the FT in September, was Tencent’s largest overseas leasing deal. It would have given the group access to chips unavailable for use in China due to curbs from Washington and Beijing.
US officials approached Oracle to raise concerns about the Tencent deal, according to two people familiar with the matter. Tencent also received visits from top officials in Guangdong, where the group is based, who asked the tech giant to support domestic Chinese chips, according to one of the people. The deal has since been cancelled, the people added. Oracle, Tencent and the White House did not immediately respond to requests for comment.
The incident shows the growing difficulties for leading US and Chinese companies in developing AI, at a time their respective nations seek to become the pre-eminent technological superpower. Oracle, led by billionaire Trump backer Larry Ellison, signed a five-year lease with Tencent © Chris Kleponis/CNP/Bloomberg A shortage of domestic supply and tightening American export controls have led Chinese tech groups to seek more computing capacity overseas. Such lease deals could also offer access to Nvidia’s cutting-edge processors not available in China.
Source: Financial Times Companies · Summarized by HeadlinesBriefing