Oracle has scrapped a five-year agreement worth an estimated $7 billion to lease advanced artificial intelligence chips to Chinese technology giant Tencent, the Financial Times reported on Wednesday, after officials in the Trump administration raised concerns about the deal.
Under the arrangement, first reported by the Financial Times in September, Tencent was to rent access to as many as 100,000 advanced AI processors housed in Oracle data centres across Southeast Asia. It was Tencent’s largest overseas computing lease, giving the company access to chips that are not available in China because of export curbs imposed by Washington and Beijing. The deal was estimated to be worth about $7 billion over five years, with an upfront payment of roughly 30 per cent of the total.
According to the report, US officials approached Oracle directly to raise concerns about the arrangement. Tencent, meanwhile, was pressed from the other side: officials in Guangdong province, where the company is headquartered, urged it to back domestic Chinese chipmakers instead. The twin pressures appear to have killed the deal, even though overseas chip leasing itself remains permitted under existing rules, the Financial Times reported.
The collapse is the latest sign of how geopolitical rivalry is reshaping the AI supply chain. Washington has spent years tightening controls on the advanced chips and manufacturing equipment that Chinese firms can obtain, while Beijing has pushed its own technology companies to reduce their reliance on foreign hardware. Deals that let Chinese groups rent computing power abroad have become a grey area in that contest, and this cancellation shows that political pressure alone can be enough to unwind them.
There are important limits to what is known. Neither Oracle nor Tencent has publicly confirmed the cancellation, and Reuters said it could not independently verify the Financial Times report. The precise financial impact on Oracle is unclear, and it is not known whether any upfront payment already made will be refunded. Readers should therefore treat the cancellation as reported, rather than confirmed, until either company comments.
Oracle’s shares fell about 1.4 per cent in pre-market trading on Wednesday following the report, according to market coverage of the news.
Sources: Financial Times, “Oracle cancels $7B AI chip lease with Tencent amid US concerns”, reported 4 November 2026 (https://www.tradingview.com/news/seekingalpha:e51e68f4d094b:0-oracle-cancels-7b-ai-chip-lease-with-tencent-amid-us-concerns-ft/); TradingKey, “Oracle Falls Over 1% Pre-Market: Reportedly Cancels About $7 Billion AI Chip Lease Agreement With Tencent After US Officials Expressed Concern” (https://www.tradingkey.com/analysis/stocks/us-stocks/262273439-orcl-oracle-ai-qq-us-tradingkey).
