Oracle has canceled a USD 7 billion deal to lease AI chips to Chinese tech giant Tencent. The Financial Times reported the news on November 4, citing people familiar with the matter. The move came after pressure from the Trump administration. Reuters said it could not confirm the report. Oracle, Tencent, and the White House did not reply to its requests for comment.
The Financial Times first reported the deal in September. It would have been Tencent's biggest chip leasing deal outside China.
Under the five-year plan, Tencent would have rented computing power at several Oracle data centers in Southeast Asia. That gave it access to about 100,000 advanced AI chips. Tencent can't get these chips at home given export limits set by Washington and Beijing.
The deal mattered to Tencent. The company is building its AI tools and training large language models. Those tasks need a lot of powerful chips.
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US officials reportedly contacted Oracle and raised concerns about the deal. After that, Oracle dropped the contract.
Tencent faced pressure at home too. Senior officials from Guangdong province, where the company is based, reportedly visited its leaders. They urged Tencent to back Chinese chip makers.
Many Chinese tech firms have looked abroad for computing power. Data centers in other countries let them access chips they can't buy at home. But this route is now harder. US cloud firms face political and legal risks when they sign such deals.
The cancellation shows how far the US-China chip fight reaches. Even a deal signed outside both countries can fall apart under government pressure.
For Tencent, the loss makes it harder to get the chips it needs. For Oracle, it shows that big contracts with Chinese firms can carry heavy risks. Other US cloud companies will likely watch this case closely as they weigh similar deals.