Oracle Cancels $7 Billion Chip Leasing Deal with China’s Tencent

Oracle Corp. has canceled a proposed $7 billion artificial intelligence chip leasing agreement with Tencent Holdings Ltd., according to a report by the Financial Times.

Last month, reports indicated that Oracle had signed a five-year agreement to lease 100,000 chips to Tencent. The arrangement would have marked Tencent's largest-ever overseas deal, allowing the Chinese company to access advanced hardware through international data centers.

However, the agreement did not proceed as planned. US officials informed Oracle of their concerns regarding the transaction, according to sources familiar with the matter cited by the Financial Times. Tencent did not immediately respond to requests for comment regarding the cancellation.

The development highlights the ongoing regulatory scrutiny surrounding the cross-border deployment of advanced computing hardware. Chinese artificial intelligence developers frequently utilize rented access to artificial intelligence accelerators—such as those produced by American firm Nvidia Corp.—that are not domestically available in China, aiming to navigate existing US export controls.

Chinese technology companies currently rank among the largest customers for data center infrastructure across Southeast Asia, where companies often seek alternative pathways to secure high-performance computing resources.

"The cancellation of this multi-billion dollar agreement underscores the complex regulatory environment surrounding global technology infrastructure and cross-border data center operations. As governments tighten oversight on advanced hardware exports, multinational technology firms must carefully evaluate compliance risks when structuring large-scale international agreements. For businesses operating in the AI and cloud sectors, regulatory alignment is becoming just as critical as commercial viability." — Dr. Shishir Gupta, Founder & CEO, StartupLanes