Microsoft is reportedly winding down Oracle deal to rent AI cloud capacity
MSFT•Microsoft is winding down an arrangement to rent AI computing from Oracle after declining to renew the contract, Bloomberg News reported. The rented capacity used an older generation of Nvidia chips and had become less valuable as Microsoft's needs evolved.
1. Cloud arrangement winds down
Microsoft has been turning off AI computing capacity rented from Oracle in recent months after declining to renew the contract, Bloomberg News reported, citing people familiar with the matter. The capacity had become less valuable as Microsoft's needs evolved and used an older generation of Nvidia chips.
2. Shares and industry context
Oracle shares fell nearly 3% in afternoon trading, while Microsoft was little changed. Both stocks had come under pressure that week after a Democratic midterm election sweep raised concerns about tighter scrutiny of new data centers.
3. Other capacity changes
The report adds to signs Microsoft is rethinking how it secures computing capacity for its AI investments. AI cloud company IREN said it had delayed some infrastructure deliveries after Microsoft requested network design changes, pushing back its target to bring more than $4 billion in annualized revenue capacity online from year-end to January, with a possible further delay until late February.
