Microsoft Reportedly Gradually Terminating AI Compute Capacity Lease Agreement with Oracle

TechFlow reported on November 7 that, according to Jin10 Data, foreign media, citing people familiar with the matter, said Microsoft has stopped renewing its AI compute capacity lease contract with Oracle and has gradually shut down leased computing resources in recent months. The sources said Oracle-supplied servers use older-generation NVIDIA chips that no longer meet Microsoft's current technical specifications.

The two parties reached the agreement in 2023 to provide compute capacity for the new AI search engine Bing, with the specific contract amount unknown. Oracle responded that demand for its AI infrastructure remains strong and older-generation GPUs still have a market. Microsoft is reassessing external AI compute partnerships, having previously committed more than USD 80 billion in compute capacity leasing to emerging cloud providers such as CoreWeave, Nscale, and Nebius.

Affected by the news, Oracle's shares quickly turned lower, with the intraday decline widening to 4.6% at one point. The stock is currently down about 3%, after earlier rising about 3.5%; its share price has fallen more than half from this year's high.

Source: TechFlow