Oracle cancels its $7 billion AI computing partnership with Tencent.
The five-year deal was originally set to provide Tencent with up to 100,000 advanced AI chips through data centers in Southeast Asia.
So what happened? The two sides couldn’t reach an agreement:
The U.S. was concerned that advanced computing power could flow to China;
Chinese local officials, meanwhile, wanted Tencent to buy more domestically made chips.
The U.S. giant wanted to sell, the Chinese giant wanted to buy, and all the business demand was there—but the deal still couldn’t get done.
The AI race is no longer just about chip performance. It’s also a contest over computing supply chains and geopolitics.
In the past, the biggest concern in business was whether a customer had money. Now, when doing AI business, you also have to consider what country the customer is from.
The five-year deal was originally set to provide Tencent with up to 100,000 advanced AI chips through data centers in Southeast Asia.
So what happened? The two sides couldn’t reach an agreement:
The U.S. was concerned that advanced computing power could flow to China;
Chinese local officials, meanwhile, wanted Tencent to buy more domestically made chips.
The U.S. giant wanted to sell, the Chinese giant wanted to buy, and all the business demand was there—but the deal still couldn’t get done.
The AI race is no longer just about chip performance. It’s also a contest over computing supply chains and geopolitics.
In the past, the biggest concern in business was whether a customer had money. Now, when doing AI business, you also have to consider what country the customer is from.