Oracle has scrapped a five-year deal to lease up to 100,000 advanced AI chips to Tencent after pressure from the Trump administration, the Financial Times reports, citing two people familiar with the matter. The lease was worth an estimated $7B (about Php 444 billion).
The chips would have stayed in several Oracle data centers in Southeast Asia, letting Tencent use hardware that US and Chinese restrictions keep out of China. It was Tencent’s largest overseas lease, with about 30% of its value due upfront, and the FT only revealed it on September 30th. Neither company named the chips at the time.
Leases like this are legal under US rules, so this wasn’t a ban. US officials approached Oracle to raise concerns, the FT says, and the contract was canceled. Oracle, Tencent and the White House didn’t immediately respond to requests for comment, so the account rests on those unnamed sources.
Tencent got pressure at home too. Senior officials from Guangdong, where the company is based, visited and asked it to support Chinese chips, one of the sources says. Tencent has been spending more to catch up in AI, and its latest Hunyuan models are closing the gap with Alibaba’s Qwen, the paper adds.
The cancellation follows another FT report, that NVIDIA told cloud customers to sell at least 51% of their services to non-Chinese companies under new contracts. Neither is a government rule. Both leave renting abroad legal on paper and harder to use in practice.
That route isn’t closed, though. ByteDance and Alibaba remain the biggest clients of Southeast Asian data centers, and Oracle is still a major supplier to ByteDance.
The chips Chinese firms are allowed to buy won’t fill the gap soon. Bloomberg reports that Alibaba, Tencent, ByteDance and others have ordered about 6 million NVIDIA RTX Pro 5500 chips, worth about $70B (about Php 4.4 trillion), and expect only about 1% of them within four months.
