Microsoft winds down Oracle deal to rent AI cloud capacity
Microsoft is winding down its 2023 agreement to rent artificial intelligence computing capacity from Oracle after opting not to renew a contract that relied on older-generation Nvidia chips.
Microsoft Corp. is winding down an arrangement to rent artificial intelligence computing capacity from Oracle Corp., according to a report by Bloomberg. The move comes as part of a broader reassessment by Microsoft of billions of dollars in cloud partnerships. Microsoft declined to renew its contract with Oracle and has been turning off the rented capacity in recent months.[1][5][7][10]
The arrangement was originally announced in 2023 to provide server infrastructure powering an AI-assisted version of Microsoft's Bing search engine. However, people familiar with the matter told Bloomberg that the hardware rented from Oracle ran on older-generation Nvidia chips that became less useful over time because they no longer met Microsoft's computing specifications. Microsoft, which has committed more than $80 billion to rent cloud capacity across other providers, declined to comment.[5][8][9]
An Oracle spokesperson maintained that demand for the company's AI infrastructure remains strong, including for earlier-generation graphics processing units, noting that Oracle renewed contracts for four-year-old GPUs in September at a 20% premium over original deal rates. Following the report, Oracle shares dropped between 5% and 6% to a two-year low, sliding from nearly $120 to around $109 to $111.[2][3][4][5][6]
Key facts
- Microsoft is winding down a deal to rent AI cloud capacity from Oracle and declined to renew the agreement.
- The rented Oracle servers utilized older-generation Nvidia chips that no longer met Microsoft's hardware specifications.
- The contract was originally established in 2023 to provide computing capacity for an AI-assisted version of Bing.
- Microsoft has committed more than $80 billion to rent capacity from other cloud providers.
- An Oracle spokesperson said demand for its AI infrastructure remains strong, noting September contract renewals for four-year-old GPUs carried a 20% premium.
- Oracle shares fell 5% to more than 6% following the report, hitting a two-year low near $109 to $111.
Sources · 10 sources
- TE
TechmemeArticle ·
Sources: Microsoft has been turning off rented computing capacity from Oracle after declining to renew a 2023 deal, because the hardware used older Nvidia chips (Brody Ford/Bloomberg) Brody Ford / Bloomberg : Sources: Microsoft has been turning off rented computing capacity from Oracle after declining to renew a 2023 deal, because the hardware used older Nvidia chips — Microsoft Corp. is winding down an arrangement to rent AI computing from Oracle Corp., part of a larger reassessment of billions of dollars in cloud partnerships.
Open source - CB
Coin Bureau@coinbureauPost on X ·
🚨BREAKING: Oracle FALLS more than 6% to a two-year LOW after news that Microsoft will wind down its deal to rent AI computing power from Oracle. $ORCL slid from nearly $120 to $109 in just FOUR hours, a nearly 9% drop from its intraday high on Friday. Microsoft opted against renewing the deal for older Nvidia chips as its computing needs changed, per Bloomberg.
Open source - TK
The Kobeissi Letter@KobeissiLetterPost on X ·
BREAKING: Oracle stock, $ORCL, falls -5% after Microsoft ends its deal to rent AI cloud capacity from the company. Oracle is now down -68% from its record high. https://t.co/SshVPMuGH5
Open source - BL
BlockNews@blocknewsdotcomPost on X ·
🚨 BREAKING: Oracle $ORCL PLUNGES over 6% to a TWO-YEAR LOW after Bloomberg reports Microsoft will wind down an AI computing deal! 📉 $ORCL dropped from nearly $120 to $109 in just FOUR HOURS, down almost 9% from Friday's intraday high. Microsoft reportedly declined to renew its deal for older Nvidia chips as its computing needs shifted.
Open source - EZ
Ed Zitron@edzitronPost on X ·
Per Bloomberg, Microsoft is winding down its deal with Oracle to rent AI cloud compute, saying that "the computing Microsoft was renting became less useful because it no longer fit the company's specifications." https://t.co/d0IKhUSnph
Open source - SB
Shay Boloor@StockSavvyShayPost on X ·
$MSFT is reportedly winding down older $NVDA capacity rented from $ORCL as it reviews billions in cloud deals but this looks more like a shift toward newer GPUs than a retreat from AI spending. After all Microsoft just asked $IREN to upgrade its GB300 network for frontier models while IREN re-contracted older H100s at double their original price suggesting AI demand is shifting across GPU generations.
Open source - BL
Bloomberg@businessPost on X ·
Microsoft is winding down an arrangement to rent AI computing from Oracle, part of a larger reassessment of billions of dollars in cloud partnerships https://t.co/UR1IjrCrLJ
Open source - UW
unusual_whales@unusual_whalesPost on X ·
Microsoft, $MSFT, is winding down a deal to rent AI cloud capacity from Oracle, $ORCL, per Bloomberg. The reason: over time, the Oracle computing it was renting became less useful because it no longer fit Microsoft’s specifications. The hardware ran on older-generation Nvidia chips, according to people familiar.
Open source - WS
Wall St Engine@wallstenginePost on X ·
$MSFT WINDS DOWN AI CLOUD DEAL WITH $ORCL Microsoft has reportedly declined to renew its 2023 agreement to rent AI computing capacity from Oracle and has been gradually shutting down that capacity in recent months, Bloomberg reports. The deal was originally intended to power an AI-enhanced version of Bing. However, the Oracle servers used older-generation Nvidia GPUs that no longer met Microsoft's computing specifications. Oracle says demand for its AI infrastructure remains strong, including for older-generation GPUs.
Open source - TE
Techmeme@TechmemePost on X ·
Sources: Microsoft has been turning off rented computing capacity from Oracle after declining to renew a 2023 deal, because the hardware used older Nvidia chips (@brodyford_ / Bloomberg) (Visit Techmeme dot com for the link and full context!)
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