Microsoft ends renewal of Oracle AI computing deal
The rented servers used older Nvidia chips that no longer met Microsoft’s requirements, people cited by Bloomberg said.
Microsoft is letting a 2023 agreement to rent Oracle computing capacity expire rather than renewing it, according to Bloomberg. People with knowledge of the matter told Bloomberg that Microsoft has been deactivating the rented capacity over recent months.
The agreement provided servers for Bing’s AI-powered search. Bloomberg’s sources said the equipment contained older Nvidia chips and no longer met Microsoft’s requirements. Bloomberg was unable to determine the agreement’s full value.
Microsoft offered no comment. Oracle maintained that demand for its AI infrastructure remained strong, including capacity using older chips. Oracle’s stock declined about 3%.
Microsoft is reviewing more than US$80 billion in commitments to rent computing capacity from outside providers, including CoreWeave, Nscale and Nebius. Bloomberg said the company’s leaders had become frustrated with those providers’ costs and delays.
Business Insider reported separately that talks over additional Oracle capacity broke down in June. Gartner has warned that newer chips could leave much of the spending on AI infrastructure exposed to large write-downs.
