- Oracle has canceled a five-year, roughly $7 billion computing-capacity contract with Tencent after the Trump administration raised concerns about the deal, the Financial Times reported.
- The contract would have given Tencent access to 100,000 advanced AI chips in Southeast Asian data centers, making it the Chinese company’s largest overseas deal of its kind.
- Chinese technology companies are increasingly leasing overseas computing capacity as U.S. export controls restrict access to advanced processors in mainland China.
Oracle has canceled a five-year contract to lease Tencent about $7 billion of computing capacity after the administration of U.S. President Donald Trump raised concerns about the deal, the Financial Times reported, citing people familiar with the matter. The agreement would have given Tencent access to 100,000 advanced AI chips in Southeast Asian data centers and would have been its largest overseas deal of that kind.
U.S. officials questioned the Tencent deal
U.S. officials approached Oracle with questions about its cooperation with Tencent, according to the report. Officials from Guangdong province, where Tencent is based, also visited the Chinese company and urged it to support domestic chipmakers.
The planned arrangement would have provided Tencent with access to advanced processors, including Nvidia designs, that cannot be used in mainland China because of restrictions imposed by Washington and Beijing. Tencent intended to use the capacity in part to train its artificial intelligence models.
Oracle, Tencent and the White House did not immediately comment on the matter.
Chinese AI companies seek overseas capacity
Chinese technology companies are increasingly leasing computing capacity outside the country as domestic resources remain scarce and U.S. export controls tighten. Current rules formally permit such arrangements, but American cloud providers face mounting pressure to limit cooperation with Chinese customers.
On Tuesday, Nvidia told cloud-services customers that at least 51% of their services must be provided to companies outside China, the Financial Times reported.
Restrictions barring advanced Nvidia chips from reaching China through third countries have increased demand for overseas computing capacity. That demand has raised data-center leasing prices, lengthened contract terms and increased upfront payments.
ByteDance and Alibaba are among the largest data-center customers in Southeast Asia. Oracle is a key regional infrastructure provider for ByteDance and operates several data centers in Malaysia.
Oracle previously stored data belonging to U.S. TikTok users. At the end of last year, it joined a consortium that acquired TikTok’s U.S. unit.
Chinese companies expand domestic AI infrastructure
Chinese companies are also accelerating development of their own AI infrastructure and models amid the technology dispute with the United States. ByteDance recently began training a model that could contain as many as 10 trillion parameters and become one of the world’s largest.
Alibaba unveiled its Zhenwu M890 AI chip in May, positioning it as an alternative to Nvidia products.
Tencent is increasing infrastructure spending as it seeks to narrow its AI development gap. Its latest Hunyuan models have shown noticeable improvement and moved closer to leading Chinese models, including Alibaba’s Qwen.
Beijing also blocked Meta’s $2 billion acquisition of Chinese AI platform Manus, tightening its control over transfers of technology assets to foreign investors.
Trump, meanwhile, announced the start of what he called the “superintelligence” era. Executives from Google, Anthropic, Meta, OpenAI, xAI and Nvidia backed a voluntary agreement covering oversight and safety audits for advanced models.
Source: Incrypted
