Oracle Cancels $7B Tencent AI Chip Deal Following US Pressure

Oracle has cancelled a multi-billion-dollar contract with Chinese tech giant Tencent to lease artificial intelligence computing power following pressure from Donald Trump's administration. The agreement, valued at approximately seven billion dollars, was set to be Tencent's largest overseas cloud-leasing deal.

• The cancelled contract was valued at approximately $7 billion
• The five-deal agreement involved around 100,000 advanced AI accelerators
• Infrastructure was planned to be hosted in Oracle's Southeast Asia data centers
• Both US officials and Chinese regional authorities exerted pressure on the companies

Details of the Scrapped Agreement

The five-year agreement was designed to provide Tencent with access to 100,000 advanced AI accelerators across several Oracle data centers in Southeast Asia. Such chips remain unavailable within mainland China due to stringent US export controls and Beijing's own regulatory limitations.

Financial Times first reported on the agreement a month prior, noting it was intended to be Tencent's largest foreign infrastructure contract. However, the cross-border AI project immediately drew intense scrutiny amid escalating tech tensions between Washington and Beijing.

Pressure From Both Sides of the Pacific

According to industry insiders, US officials directly approached Oracle executives to express deep concerns regarding the partnership. Washington has been aggressively closing any loopholes that might allow Chinese firms to access advanced American AI hardware through overseas data center infrastructure.

Concurrently, Tencent faced internal pressure from Chinese authorities. Officials representing the government of Guangdong province, where Tencent is headquartered, reportedly visited the company's offices to urge support for domestic chip manufacturers instead.

Market Implications and Tech Context

As of now, Oracle, Tencent, and the White House have declined to comment on the matter, and Reuters could not independently verify the cancellation. Nevertheless, the situation underscores the extreme vulnerability of major cross-border tech ventures in the current geopolitical landscape.

For the global tech industry, this development highlights the deepening technological divide between the US and China. Cloud providers and artificial intelligence developers face mounting compliance hurdles when attempting to scale cross-border infrastructure, reshaping global market strategies.