Oracle Scraps $7 Billion Tencent AI Chip Lease After U.S. Pressure, FT Says

Economic Warfare & Trade Policy › Tech & export controls

Oracle has canceled a roughly $7 billion Oracle Tencent chip lease that would have given the Chinese tech giant access to about 100,000 advanced AI chips in Southeast Asia, the Financial Times reported on Wednesday, Nov. 4, 2026. According to the FT, U.S. officials approached Oracle with concerns about the five-year deal before it was scrapped.

Key figures: About $7 billion estimated lease value · About 100,000 advanced AI chips · Five-year term · About 30% to be paid upfront

What the Oracle Tencent deal was and how it ended

The FT first reported last month that Tencent had signed the lease, which it described as the Shenzhen company’s largest overseas lease deal. Under the agreement, Tencent was to rent computing capacity across several Oracle data centers in Southeast Asia for five years and pay about 30% of the deal’s value upfront, according to The Next Web’s summary of the FT reports. The capacity would have given Tencent use of roughly 100,000 advanced AI chips that it cannot buy at home, because of curbs set by both Washington and Beijing.

The deal is now off, the FT reported Wednesday, citing people familiar with the matter. Reuters said it could not immediately verify the report. Oracle, Tencent and the White House did not respond to Reuters’ requests for comment. No cancellation date or penalty terms have been made public.

Pressure from Washington and Beijing

The FT said U.S. officials raised concerns with Oracle about the lease, part of the Trump administration‘s effort to stop Chinese companies from reaching top-end American chips through third parties. Pressure also came from the Chinese side. Senior officials from Guangdong province, where Tencent is based, visited the company and urged it to support Chinese-made chips, the FT reported.

Renting computing power abroad has become a common workaround for Chinese AI developers. U.S. export controls bar Nvidia’s most advanced accelerators from being shipped to China, but those rules have generally not stopped Chinese firms from using the chips in data centers located in other countries. Washington has tried for years to close that route.

By the numbers: what the lease was worth

Only the headline value and the upfront share have been reported, so a full breakdown is not public. Based on the FT’s figures, The Boston Report calculates:

• Upfront payment: about $2.1 billion, or 30% of $7 billion (TBR calculation).
• Average annual value: about $1.4 billion a year over the five-year term (TBR calculation, assuming even spending).
• Cost per chip: about $70,000 of lease value per chip over five years, or roughly $14,000 per chip per year (TBR calculation from $7 billion and about 100,000 chips).
• Scale for Oracle: the lease was about a third the size of the roughly $20 billion debt deal Oracle recently priced to help fund its AI cloud expansion, with interest of up to 8.65%, according to The Next Web.

Part of a wider squeeze on Chinese access to AI chips

The cancellation follows an FT report on Tuesday that Nvidia had told its cloud partners to limit Chinese customers to 49% of their capacity on new contracts. Nvidia neither confirmed nor denied that report. Also on Wednesday, Bloomberg reported that Chinese companies including Tencent, Alibaba and ByteDance expect to receive only about 1% of roughly 6 million Nvidia RTX Pro 5500 chips they have ordered over the next four months.

Together, the reports point to tighter limits on every main route Chinese firms use to get AI computing power: buying permitted chips, renting chips overseas and turning to domestic suppliers. Tencent has kept building AI products despite those limits; this week it released its Hy4 AI model. U.S. licensing delays are also weighing on SK hynix’s China chip plant, The Boston Report reported earlier Wednesday.

What it means for Oracle

For Oracle, the Tencent contract was one of several large, long-term agreements behind its rapid build-out of AI cloud capacity, The Next Web reported. The company is funding part of that expansion with borrowed money. Losing one estimated $7 billion contract will not change Oracle’s overall strategy, but it shows that Washington’s China policy can now reach directly into the customer lists of U.S. cloud providers, including deals signed for data centers outside the United States.

Sources

• Reuters via StreetInsider: Oracle abandons $7 billion Tencent AI deal under Trump pressure, FT reports (Nov. 4, 2026)
• The Next Web: Oracle cancels $7B Tencent AI chip lease under US pressure, FT reports
• The Business Times: Oracle scraps US$7 billion deal to lease chips to Tencent
• Investing.com: Oracle cancels $7 bln chip leasing deal with Tencent, FT reports
• The Next Web: Nvidia tells cloud partners to cap Chinese business at 49%, FT reports