Oracle Cancels $7 Billion AI Chip Lease With Tencent After US Officials Raise Concerns

According to the FT, which cited two people familiar with the matter, Oracle signed the five-year lease earlier this year. It would have given Tencent access to as many as 100,000 advanced AI chips housed in several Oracle data centres in Southeast Asia. The FT had reported last month that the agreement was Tencent's largest overseas lease deal. The chips involved are not available in China because of restrictions imposed by both Washington and Beijing.

The pressure did not come only from the US side. The FT reported that Beijing had also scrutinised the deal, and that officials from Guangdong, the province where Tencent is based, visited the company and asked it to support domestic Chinese chips.

Oracle, Tencent and the White House did not respond to Reuters' requests for comment. Reuters noted that neither company had commented on the deal and that their filings did not mention it, so the account rests on the FT's unnamed sources.

A Narrowing Route to Advanced Chips

Leasing capacity in data centres outside China has been one of the main ways Chinese technology companies get access to top-end Nvidia hardware they cannot buy directly. US export controls restrict sales of the most advanced accelerators into China, but they have been less clear about cloud access to the same chips abroad.

The cancellation comes a day after the FT reported that Nvidia had told its cloud computing customers that at least 51 per cent of their capacity must be sold to non-Chinese companies. Together, the two reports suggest that the lease route is coming under closer scrutiny from both the US government and the chipmaker itself.

Tencent is not the only Chinese company to use this route. According to the Investing.com account of the FT report, ByteDance and Alibaba still have large chip-leasing deals with US providers, and Oracle is a major supplier to ByteDance in Asia, operating several data centres in Malaysia.

Why It Matters

For Oracle, the reported cancellation takes a large multi-year contract out of its cloud pipeline. The company has been among the most aggressive builders of AI capacity, and investors are watching closely whether that capacity can be filled. For Tencent, it removes a large block of overseas compute just as Chinese buyers struggle to obtain export-compliant Nvidia parts in volume.

For governments and data centre operators in the Gulf and Southeast Asia, which want to host AI capacity for customers around the world, the episode is a reminder that who the end customer is now matters as much as where the chips sit. Washington's stance on Chinese access to leased compute is likely to shape how neutral hosting markets write their contracts.