Oracle has canceled a multibillion-dollar agreement to lease advanced artificial intelligence chips to Chinese technology group Tencent after facing pressure from the administration of US President Donald Trump, the Financial Times reported on Wednesday.
US officials approached Oracle to raise concerns about the proposed arrangement, according to the newspaper, which cited people familiar with the matter. The intervention underpins Washington’s broader efforts to restrict China’s access to advanced computing infrastructure, including through commercial arrangements that could provide Chinese companies with access to chips unavailable under existing export controls.
Tencent also faced pressure from Chinese authorities. Senior officials from Guangdong province, where the company is headquartered, visited the group and urged it to support the use of domestically produced Chinese chips, the Financial Times reported.
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The Financial Times reported last month that Tencent had signed its largest overseas chip-leasing agreement, estimated to be worth about $7 billion, with Oracle.
Under the proposed five-year arrangement, Tencent would have leased computing capacity across several Oracle data centers in Southeast Asia. The agreement was expected to provide access to approximately 100,000 advanced AI chips that were unavailable in China because of restrictions imposed by both Washington and Beijing, according to the report.
The arrangement would have allowed Tencent to secure substantial AI computing capacity outside mainland China without relying entirely on infrastructure based within the country. Its cancellation removes a potential route for the company to access high-performance chips through overseas data centers.
The reported intervention also shows how US export restrictions can extend beyond direct sales of advanced semiconductors. Leasing arrangements and access to computing capacity abroad can create alternative channels through which Chinese technology companies obtain the resources required to develop and operate advanced AI systems.
For Oracle, the decision places geopolitical considerations directly into its international cloud infrastructure business. The company operates data centers and provides computing services to customers across markets, but arrangements involving Chinese technology groups can attract scrutiny when they involve advanced chips subject to US restrictions.
The reported cancellation points to pressure from both sides of the US-China technology dispute. Washington has sought to limit China’s access to advanced semiconductor technology, while Chinese authorities have encouraged domestic companies to build greater reliance on locally produced chips.
Tencent’s reported engagement with Guangdong officials suggests that the push for domestic alternatives is also being pursued at the company level. Beijing has broader ambitions to reduce dependence on foreign technology, particularly in strategically important areas such as semiconductors and artificial intelligence.
The two pressures create a difficult operating environment for Chinese technology companies. Overseas leasing can provide access to computing resources that are restricted or unavailable domestically, but such arrangements may face regulatory and political scrutiny in the jurisdictions where the infrastructure and chips are located. At the same time, reliance on domestic suppliers is constrained by the availability and performance of locally produced alternatives.
The deal’s reported value of $7 billion also illustrates the scale of investment required to secure advanced AI computing capacity. Access to large clusters of high-performance chips has become so essential for training and running sophisticated AI models, making control over semiconductor supply and data-center infrastructure a central part of the technology competition between the United States and China.
However, the reported cancellation does not establish whether Tencent has secured alternative computing arrangements or whether Oracle will redirect the capacity to other customers. The companies have not publicly commented on the reported decision.
The episode has created a fresh challenge for global cloud providers, chip suppliers and technology companies operating across the two markets. As governments tighten oversight of advanced computing resources, commercial agreements involving AI infrastructure are increasingly being exposed to national security and industrial policy considerations.