Oracle Cancels $7 Billion Contract to Lease 100,000 AI Chips to Tencent After U.S. Opposition
Oracle canceled a lease contract worth $7 billion to provide Tencent with up to 100,000 advanced AI chips after opposition from the U.S. side. This 5-year contract was Tencent's largest overseas lease and would originally have provided chips unavailable in China through Southeast Asian data centers. China is also applying pressure; officials from Guangdong visited Tencent and urged it to support domestic chips; Nvidia has required cloud customers to sell at least 51% of their services to non-Chinese companies. Tencent thus lost the planned compute, while its Hunyuan model is gradually closing the gap with Alibaba's Qwen.
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The original text presents details of simultaneous tightening of compute leasing regulations on both the U.S. and Chinese sides, allowing readers to understand how the channels through which Chinese labs obtain overseas training compute are narrowing.
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Oracle has scrapped a $7B lease giving Tencent up to 100K advanced AI chips after US objections.
The 5-year contract, Tencent’s largest overseas lease, would have supplied chips unavailable in China from data centres across south-east Asia.
Chinese labs rent that capacity mainly for model training, which domestic chips can’t yet handle.
China pushed from the other side, as senior Guangdong officials visited Tencent and urged it to back domestic chips, one person said.
Such leases remain legal, but Nvidia has now told cloud clients to sell at least 51% of their services to non-Chinese companies.
Tighter export controls had already pushed these leases toward higher prices, longer terms and bigger upfront payments, so every cancellation strips premium revenue from US cloud providers.
With both governments squeezing that route, Tencent loses planned compute just as its Hunyuan models were closing the gap with Alibaba’s Qwen.