Oracle has abandoned a proposed $7 billion agreement with Chinese technology company Tencent to lease advanced artificial intelligence (AI) chips, following pressure from the Trump administration, according to a Financial Times report cited by Reuters on November 4.
The five-year agreement was expected to allow Tencent to lease up to 100,000 advanced AI chips through data centres in Southeast Asia. The arrangement would have provided the Chinese company with access to processors that are restricted from being exported directly to China under US technology controls.
The reported cancellation highlights the growing scrutiny of US technology companies providing computing infrastructure to Chinese businesses, even when the services are delivered through facilities outside China.
US officials had raised concerns about the proposed arrangement, while Chinese officials had also urged Tencent to support domestic chipmakers. The developments created additional complications for the deal.
Chinese technology companies have increasingly looked outside the country for access to advanced computing capacity, as domestic chip supplies remain limited and are not yet able to match the most advanced processors used for AI model training.
The restrictions have also affected the way US cloud and technology providers serve Chinese customers. Nvidia has reportedly told cloud service providers to ensure that at least 51% of their services are directed towards non-Chinese customers.
Southeast Asia has become an important destination for Chinese technology companies seeking computing infrastructure. ByteDance and Alibaba are among the region’s largest Chinese clients, while Tencent has increased its infrastructure spending as it develops its Hunyuan AI models.
The proposed Oracle agreement would have supported Tencent’s efforts to expand its AI computing capacity and improve its position in the AI market.The reported withdrawal reflects the wider impact of US-China technology restrictions on international AI infrastructure deals, particularly those involving advanced processors, cloud computing and data-centre services.
