NEW DELHI–Oracle has reportedly canceled a multibillion-dollar agreement that would have provided Chinese technology giant Tencent with access to approximately 100,000 advanced artificial intelligence chips through overseas data centers, following pressure from the Trump administration.
The proposed agreement, valued at approximately $7 billion, was abandoned after U.S. officials raised concerns about Tencent gaining access to advanced computing technology, according to a report by the Financial Times.
The cancellation reflects increasing tensions between Washington and Beijing over artificial intelligence infrastructure, advanced semiconductors and restrictions on China’s access to powerful computing systems.
Under the proposed five-year agreement, Tencent would have leased computing capacity supported by approximately 100,000 advanced AI chips located in Oracle-operated data centers across Southeast Asia.
The arrangement, first reported by the Financial Times last month, was described as Tencent’s largest overseas AI computing lease.
Access to the chips would have allowed Tencent to expand its artificial intelligence development capabilities despite U.S. restrictions on direct exports of advanced semiconductors to China.
American officials reportedly approached Oracle to express concerns about the agreement, ultimately contributing to the company’s decision to cancel the proposed transaction.
The United States has imposed export controls on high-performance semiconductors and other technologies used in artificial intelligence development, seeking to restrict China’s access to advanced computing capabilities.
However, Chinese technology companies have increasingly explored overseas data center arrangements as an alternative to purchasing restricted chips directly.
Such arrangements allow companies to access computing power hosted outside China without necessarily importing the underlying semiconductors.
The chips are particularly important for training sophisticated artificial intelligence models, a process that requires substantial computing resources.
Chinese technology companies continue to face limitations in accessing the most advanced semiconductor technology, while domestic chip manufacturers work to develop alternatives capable of supporting increasingly complex AI workloads.
Tencent has reportedly faced pressure from Chinese authorities as well.
According to the Financial Times, senior government officials in Guangdong province, where Tencent is headquartered, encouraged the company to increase its reliance on domestically developed Chinese semiconductors instead of foreign technology.
The competing pressures illustrate the challenges facing Chinese technology companies as they seek access to advanced AI computing resources while navigating U.S. restrictions and Beijing’s efforts to promote domestic semiconductor production.
Reuters said it could not independently verify the Financial Times report.
Oracle, Tencent and the White House did not immediately respond to requests for comment.
Although existing U.S. regulations generally permit certain overseas computing arrangements involving Chinese customers, American technology companies are facing greater scrutiny over transactions that could provide access to advanced AI capabilities.
The reported cancellation underscores how geopolitical tensions are increasingly affecting international cloud computing agreements, even when proposed transactions do not directly involve exporting restricted semiconductors to China. (Source: IANS)
