Business · Companies · 4 hrs ago
Microsoft ends Oracle AI computing deal as it reviews cloud partnerships
Microsoft has ended a deal to rent AI computing capacity from Oracle, according to people familiar with the matter.
The companies announced the agreement in 2023, when Oracle agreed to provide servers for an AI-powered version of Microsoft's Bing search engine.
Microsoft stopped renewing the contract and has been gradually switching off the capacity in recent months.
The rented Oracle hardware used older generations of Nvidia chips that no longer met Microsoft's changing requirements, according to the people.
Oracle said demand for its AI infrastructure remains strong, including for older-generation graphics processors.
Microsoft is reviewing cloud deals worth billions of dollars as it seeks to manage the costs and delays involved in expanding computing capacity for AI.
The company has also tightened oversight of some data-centre projects run by newer cloud providers, but no further decision on its partnerships was stated.
Microsoft has decided not to renew an agreement to rent AI computing capacity from Oracle and has been gradually ending its use of that capacity.
The move is part of a broader review of Microsoft’s cloud partnerships, which are worth billions of dollars.
The Oracle hardware used older generations of Nvidia chips that reportedly no longer matched Microsoft’s requirements.
The agreement, announced in 2023, was intended to provide computing power for an AI-powered version of Microsoft’s Bing search engine.
Oracle said demand for its AI infrastructure remains strong, including for older-generation graphics processors.
- Who
- Microsoft and Oracle.
- What
- Microsoft did not renew its agreement to rent AI computing capacity from Oracle and has been phasing out its use.
- When
- The agreement was announced in 2023. Microsoft has been ending its use of the capacity over recent months; the report was published on November 6, 2026.
- Where
- The agreement covered access to Oracle servers. A physical location is not stated.
- Why
- The rented capacity reportedly no longer matched Microsoft’s requirements because it used older Nvidia chips. The move is part of a wider review of cloud partnerships.
Microsoft
Oracle
Fit of Oracle hardware
Microsoft
The rented capacity reportedly became less useful because it no longer met Microsoft’s requirements.
Oracle
Oracle said demand for its AI infrastructure remains strong, including for older-generation graphics processors.
Oracle and Microsoft announced an agreement for Microsoft to access Oracle servers for an AI-powered version of Bing.
Oracle said it was renewing contracts for graphics processing units that were four years old, at a 20% premium to their original deal price.
Microsoft began gradually shutting off the computing capacity it rented from Oracle after deciding not to renew the contract.
AI cloud company Iren said it had delayed some infrastructure deliveries after Microsoft requested changes to the network design.
Reports said Microsoft had ended the Oracle agreement as part of a wider review of its cloud partnerships.
- Agreement announced
- 2023
- Oracle hardware
- Older-generation Nvidia chips
- Planned use
- AI-powered version of Bing
- Microsoft cloud commitments
- More than $80 billion to rent computing capacity from other cloud companies
- Oracle cloud revenue
- $18 billion in the financial year ended May 2026
2 sources
What people are saying
Demand for the company's AI infrastructure remains strong, including for graphics processors from older generations.