Oracle has called off a $7 billion agreement to lease 100,000 artificial intelligence chips to Tencent Holdings, the Financial Times reported on Tuesday, citing two people familiar with the matter. The reversal comes after US officials raised concerns about the arrangement, which the same newspaper had disclosed only weeks earlier as the Chinese company’s largest ever overseas deal.
The deal that was
In October the FT reported that Oracle had signed a five-year contract to supply the accelerators, a move that would have given Tencent access to advanced hardware that US export controls effectively keep out of China. Chinese AI developers have been renting capacity in data centres across Southeast Asia to work around those restrictions, making the region a critical outlet for American chipmakers and their cloud partners.
Washington steps in
US officials subsequently told Oracle of their concerns about the Tencent agreement, according to the FT’s sources. The paper did not specify which agency delivered the message or what precise national-security rationale was cited. Oracle and Tencent did not immediately respond to requests for comment.
The pattern hardens
The cancellation underscores how quickly the US government is moving to close the offshore loophole that has let Chinese firms train models on restricted silicon. For cloud providers, the message is clear: revenue from Chinese hyperscalers now comes with a direct line to Washington, and the regulatory risk is no longer theoretical.