Oracle backed out of the $7 billion contract it signed with Tencent.
The contract was signed last month. Tencent was to rent 100,000 AI chips housed in Oracle data centers in Southeast Asia for five years, accessing them remotely from China. Not a single chip would be shipped into China. Of all the overseas computing capacity Tencent has rented so far, this was the biggest deal.
Today, the Financial Times reported that the deal had been canceled. It was reportedly U.S. officials who approached Oracle, saying they had concerns about the transaction. Oracle founder Ellison is a Trump supporter. The deal was signed just last month—and now it’s canceled.
This contract did not violate any current law. The U.S. ban on chip sales applies to chips physically crossing the border; remotely accessing them from China doesn’t count. In January, the House passed a bill aimed at closing this loophole, but the Senate has yet to vote on it.
Bloomberg had another report the same day. Nvidia’s RTX Pro 5500 isn’t on the restricted list, and companies including Alibaba, Tencent, and ByteDance ordered six million of them at $11,000 apiece, for a total of about $70 billion. But only tens of thousands—around 1%—will arrive over the next four months. Nvidia has given factory capacity to its next-generation products. No rules have been broken, but the chips still aren’t available. Buyers have estimated that they’ll receive around 700,000 chips by the end of 2027—less than 12% of their order.
Tencent spent 84.7 billion yuan on equipment in the first half of this year, more than it spent all of last year. The money’s been spent, but the route is cut off.
A $7 billion contract can just disappear like that. As for what compensation there’ll be for breach of contract, I honestly have no idea.
#AI #算力 #Oracle
The contract was signed last month. Tencent was to rent 100,000 AI chips housed in Oracle data centers in Southeast Asia for five years, accessing them remotely from China. Not a single chip would be shipped into China. Of all the overseas computing capacity Tencent has rented so far, this was the biggest deal.
Today, the Financial Times reported that the deal had been canceled. It was reportedly U.S. officials who approached Oracle, saying they had concerns about the transaction. Oracle founder Ellison is a Trump supporter. The deal was signed just last month—and now it’s canceled.
This contract did not violate any current law. The U.S. ban on chip sales applies to chips physically crossing the border; remotely accessing them from China doesn’t count. In January, the House passed a bill aimed at closing this loophole, but the Senate has yet to vote on it.
Bloomberg had another report the same day. Nvidia’s RTX Pro 5500 isn’t on the restricted list, and companies including Alibaba, Tencent, and ByteDance ordered six million of them at $11,000 apiece, for a total of about $70 billion. But only tens of thousands—around 1%—will arrive over the next four months. Nvidia has given factory capacity to its next-generation products. No rules have been broken, but the chips still aren’t available. Buyers have estimated that they’ll receive around 700,000 chips by the end of 2027—less than 12% of their order.
Tencent spent 84.7 billion yuan on equipment in the first half of this year, more than it spent all of last year. The money’s been spent, but the route is cut off.
A $7 billion contract can just disappear like that. As for what compensation there’ll be for breach of contract, I honestly have no idea.
#AI #算力 #Oracle