Microsoft is winding down an Oracle deal to rent AI cloud capacity, Bloomberg reports

Microsoft is winding down an arrangement to rent AI computing capacity from Oracle as part of a larger reassessment of billions of dollars in cloud partnerships, Bloomberg News reported on Friday, Nov. 6, citing people familiar with the matter, according to Reuters.

Bloomberg said Microsoft has been turning off rented computing capacity from Oracle in recent months after declining to renew the contract, Reuters reported via Investing.com and CNA. Over time, the capacity Microsoft was renting became less valuable as it no longer met the company’s evolving needs, the Bloomberg report said, noting that the Oracle hardware used an older generation of Nvidia chips.

Microsoft and Oracle did not immediately respond to Reuters requests for comment.

The report adds to signs that Microsoft is rethinking how it secures computing capacity to get more out of its massive AI investments, Reuters said. The Oracle contract unwind is separate from Microsoft’s scrutiny of neocloud data-center builders such as Nebius, IREN and Nscale, covered in a companion AI Tech Daily report.

On Thursday, Nov. 5, AI cloud provider IREN said it delayed some infrastructure deliveries after Microsoft requested changes to its network design, Reuters reported. That shift pushed back IREN’s target for bringing more than $4 billion in annualized revenue capacity online from year-end to January, with a possible further delay until late February.

Oracle has faced other large AI capacity reversals this week. On Wednesday, Nov. 4, the Financial Times reported that Oracle canceled an estimated $7 billion, five-year lease that would have given Tencent access to about 100,000 advanced AI chips across Southeast Asia after US officials raised concerns about the arrangement, according to Reuters.

Microsoft is winding down an Oracle deal to rent AI cloud capacity, Bloomberg reports

Sources