Trump administration officials went to Oracle with concerns about its chip leasing contract with Tencent, and the deal has since been cancelled, two people familiar with the matter told the Financial Times.
The five-year lease, worth an estimated $7 billion, would have given the Chinese tech giant access to as many as 100,000 advanced AI chips across a string of Oracle data centers in Southeast Asia, chips it can't use at home because of curbs from both Washington and Beijing. It was Tencent's largest overseas leasing deal. Top officials in Guangdong, where Tencent is based, also visited the company and asked it to back domestic Chinese chips, according to one of the people.
Overseas leasing deals like this one are allowed under existing rules, as the FT notes, so no regulation forced Oracle's hand. The contract was cancelled after officials raised their concerns with a company led by billionaire Trump backer Larry Ellison.
The cancellation landed a day after the FT reported that Nvidia has told data center and cloud customers that at least 51% of their services must go to non-Chinese companies, a requirement five people said it had never imposed before and has delivered verbally. That rule covers only new contracts and leaves existing agreements alone. Tencent's lease was signed earlier this year, so Oracle walked away from a contract Nvidia's own rule would have left in place.
In
