Sources: Oracle has scrapped a ~$7B, five-year deal to lease as many as 100K advanced AI chips to Tencent after bowing to pressure from the Trump administration
Intervention comes amid growing tension for US AI infrastructure groups doing business with Chinese tech giants.
Context & Ripple Effects
Oracle's reversal unwinds the five-year Tencent lease announced in October, which was structured to give Tencent access to advanced chips through Southeast Asian data centers. It makes US policy pressure, rather than data-center location alone, a determinant of Oracle's China-linked AI infrastructure business.
Tencent had already been among Chinese companies shifting some chip orders toward Huawei rather than Nvidia's lower-powered offerings. Nvidia's reported effort to adapt chips for China-compliant sales shows how suppliers had been seeking permitted routes into the same market.
First-order effects
- Oracle loses a planned five-year source of leasing revenue tied to roughly 100,000 advanced AI chips, while Tencent loses the offshore capacity arrangement it had signed for.
- The Trump administration establishes direct leverage over a US provider's provision of advanced AI compute to a Chinese technology group, even when the servers are located in Southeast Asia.
Second-order effects
- Tencent's procurement incentives tilt further toward compute sources outside this Oracle arrangement, including the domestic-chip alternatives Chinese buyers had already begun evaluating.
- Oracle's data-center buildout and chip-purchase plans face a narrower set of usable customers when China-linked demand can be constrained after a commercial agreement is signed.
Third-order effects
- If such intervention becomes a repeatable policy tool, cross-border cloud leasing becomes a strategic-control issue alongside physical chip exports, reducing the value of offshore hosting as a workaround.
- AI infrastructure providers will need to treat geopolitical eligibility as a core variable in long-duration capacity contracts, not merely a compliance check at the point of chip sale.
The trend: Advanced AI compute is becoming strategic leverage, with governments extending control from chip shipments to the cloud contracts that put those chips to work.
Related: Compute as strategic leverage · AI infrastructure duration · Oracle · Tencent · Tencent’s Oracle AI chip lease · Chinese buyers shift some orders to Huawei
Related Coverage
- Oracle Scraps $7 Billion Deal to Lease Chips to Tencent, FT Says Bloomberg · Mark Anderson
- Oracle cancels $7 bln chip leasing deal with Tencent, FT reports Investing.com · Ambar Warrick
- Oracle abandons $7 billion Tencent AI deal under Trump pressure, FT reports Reuters · Shivani Tanna
- Oracle cancels $7B AI chip lease with Tencent amid US concerns: FT Seeking Alpha · Arundhati Sarkar
- Oracle abandons $7 billion Tencent AI deal under Trump pressure: FT Reuters
- Nvidia to ship 1% of $70B RTX chips ordered by Alibaba, Tencent: report Seeking Alpha · Arundhati Sarkar
- Nvidia China clients to get 1pc of ordered RTX chips The Standard
- Nvidia to Fill Just 1% of Chinese Chip Orders Amid Supply Crunch Seoul Economic Daily · Park Si-Jin
- Nvidia orders data centre clients to reduce China exposure, FT reports Reuters · Shivani Tanna
- Sources: Nvidia verbally told cloud compute clients they must sell 51%+ of their services to non-Chinese companies, as the US further limits China's chip access Financial Times
- Tencent rolls out AI model trained with limited cybersecurity data amid hacking fears Reuters · Nichiket Sunil
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- Nvidia can only fulfill 1% of China's massive $70 billion GPU order for AI chips, report claims — supply constraints choke export-friendly RTX Pro 5500 deliveries despite huge demand Tom's Hardware · Ben Stockton
- How Nvidia uses soft power to influence customers and shape US chip policy; sources: OpenAI took no public stance on China chip exports to avoid angering Nvidia The Information
- Oracle drops Tencent as cloud client, losing multi-billion-dollar contract - report DatacenterDynamics · Georgia Butler
- Double Squeeze: Oracle Drops Tencent's $7 Billion Lease Implicator.ai · Marcus Schuler
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- Oracle Scraps $7 Billion Tencent AI Chip Deal Under U.S., Chinese Pressure: Report Techstrong IT · Jon Swartz
- Oracle Kills $7BN Tencent AI Chip Deal Under Trump Pressure ZeroHedge News · Tyler Durden
- Big Tech goes down with GOP Politico
- Nvidia tells data center partners to cut China exposure, limits RTX chip sales to mainland DatacenterDynamics · Sebastian Moss
- Oracle nixes $7B chip leasing deal with China's Tencent after Trump admin pushback: report New York Post · Thomas Barrabi
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Analysis
Discussion
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@tanarrowz
@tanarrowz
on x
$ORCL is a major supplier to ByteDance in Asia with multiple data centres in Malaysia. The company also hosted US customer data for the Chinese group's social media platform TikTok b4 being part of a consortium tt late last yr acq TikTok US https://www.ft.com/...
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@calebwatney
Caleb Watney
on x
Great reporting here. I think people have been sleeping on how aggressively Nvidia has been operating in DC. I suspect that is coming back to bite them!
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@plmattis
Peter Mattis
on x
From what I've heard and seen over the last few years, there is a lot more to tell. Some of the corporate people do not seem to think that people talk. The word gets around — as @ChrisRMcGuire suggests. It's one thing to disagree; it's another to feel like there was bad faith.
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@niubi
Bill Bishop
on x
full story not yet been told -
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@niubi
@niubi
on x
“Chris McGuire, a senior fellow for China and emerging technologies at the Council on Foreign Relations, said Nvidia has created mistrust among policymakers by exaggerating the capabilities of China's homegrown AI chips as it seeks looser export controls...as policymakers in the …
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@steph_palazzolo
Stephanie Palazzolo
on x
Nvidia and its CEO Jensen Huang have used their immense soft power to protect their business and influence policy. That's shaped the policy stances of companies like OpenAI. More recently, researchers like Noam Brown have questioned the company's views in Slack channels.
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@ns123abc
Nik
on x
BREAKING: Oracle just CANCELED its $7 billion AI deal with Tencent it has begun
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@rohanpaul_ai
Rohan Paul
on x
Oracle has scrapped a $7B lease giving Tencent up to 100K advanced AI chips after US objections. The 5-year contract, Tencent's largest overseas lease, would have supplied chips unavailable in China from data centres across south-east Asia. Chinese labs rent that capacity mainly …
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@kakashiii111
@kakashiii111
on x
There are a few questions from this: 1. Why all of a sudden Trump put pressure on this, while from the very beginning he turned a blind eye to what was happening with Chinese customers and Nvidia GPUs? 2. Tencent will need this compute. What now? A contract with a local datacente…
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@jwupacific
Jennifer Wu
on x
China tried to rent 100,000 American AI chips through a U.S. company. The deal just collapsed. Oracle just canceled a $7 billion deal that would have given Tencent access to advanced AI chips through data centers in Southeast Asia. The five-year lease would have let Tencent use c…
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@puckrin
Nic
on x
Turns out Larry Ellison's relationship with Trump is hitting roadblocks. Oracle has just cancelled a $7B data centre lease for Tencent after pressure from Washington. AI capacity is now being cancelled before it is built, just as the midterm selloff intensifies.
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@wallstengine
@wallstengine
on x
Oracle $ORCL has reportedly canceled a $7B AI chip leasing deal with Tencent following pressure from the Trump administration, according to the FT. The five-year agreement would have given Tencent access to as many as 100,000 advanced AI chips across Oracle data centers in Southe…
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@zijing_wu
Zijing Wu
on x
Scoop: Oracle cancels $7b Tencent data centre deal under Trump pressure with @ArashMassoudi @rafeuddin_ @AsiaLens https://as.ft.com/...
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@thepandaily
@thepandaily
on x
@Techmeme In Tencent's blind finance eval with 213 professionals across 579 real tasks, Hy4 scored 3.04, ahead of DeepSeek V4.1 Flash at 2.97 and Kimi K3.1 Pro and GLM-5.3 at 2.68. A cheaper Flash version is promised soon.
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@yonglongt
Yonglong Tian
on x
Guess folks still love high-performing open-weight models 👀 We are taking a cautious approach to release the weights. Give it a spin and let us know what you think!
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@shunyuyao12
Shunyu Yao
on x
Proud of what we've achieved under a year! Priortize security, usefulness, human evals, and generalization. Favorite part of mine is the bottom line of the plot 😂
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@tencenthunyuan
Tencent Hy
on x
Introducing Hy4
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@jumperz
@jumperz
on x
wild, HY4 is out and it's looking really good.. here's where it really good at > finance research: #1 among open models in Tencent's evaluations > game dev: +19.1% improvement, trained for Unity, Unreal, and Godot > frontend: strong at building complex UIs and full-stack apps > c…
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@ivanfioravanti
Ivan Fioravanti
on x
Here it is! This is the model I was early testing in these days! Don't underestimate Tencent. 🚀
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@tencentai_news
@tencentai_news
on x
Meet Hy4. Out of preview. ◆ First Hy model with eyes: native vision + computer use. ◆ The price stayed in preview. The benchmarks didn't. ◆ Open weights coming soon. Hy4 Flash right behind.
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@arena
@arena
on x
Exciting news from Agent Arena: Hy4 by @TencentHunyuan just landed #14 overall. Currently proprietary, but once its weights are released it will tie with Kimi K3.1 Pro for #1 among open models! Across +8.5K real-world, long-horizon agentic sessions from our global community of us…
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@kimmonismus
@kimmonismus
on x
Tencents new Hy4 looks like a serious challenger to the strongest open-weight AI models. …
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@shengjiewa34067
Shengjie Wang
on x
Built for production—intelligence + user experience is the ultimate goal we pursue. Backed by Tencent's strong product capabilities and user feedback, we can confidently say our data flywheel is among the top in the world. Looking forward to the next version spinning the flywheel…
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@tencenthunyuan
Tencent Hy
on x
👋Hy4 is here, new with vision. Firmly among the leading open models. More productive everywhere: finance, frontend, game, officework, research... Built responsibly, with cyber/biosecurity in mind. Try it out and let us know! 🔗：https://hy.tencent.ai/ ...
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r/accelerate
r
on reddit
Tencent releases Hy4, it claims to rank among the world's strongest open-weight models
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@wallstengine
@wallstengine
on x
Alibaba, Tencent, ByteDance & other Chinese 🇨🇳 AI firms have ordered 6 Million RTX Pro 5500 chips worth ~$70B, Bloomberg reports. They expect just ~1% in four months: several thousand chips by year-end, then tens of thousands around February. Buyers estimate ~700K by end-2027