IT News on November 7th: According to a report by Bloomberg today, Microsoft is gradually ending its AI computing power leasing collaboration with Oracle (Oracle).
It is reported that Microsoft has previously decided not to renew the relevant contracts and has recently begun to shut down some computing resources leased from Oracle. This is also part of Microsoft's re-evaluation of its multi-billion-dollar cloud computing partnerships.
Insiders revealed that due to the constant changes in Microsoft's own technical specifications, the computing resources previously rented could no longer meet its needs. The servers provided by Oracle used an earlier generation of NVIDIA GPU chips, which reduced the practical value of this computing power for Microsoft.
An Oracle spokesperson stated that its AI infrastructure demand remains strong, which also includes the earlier generation of GPU. Oracle previously indicated in September that the renewal price for some GPU resources that have been in use for about four years is 20% higher than the initial contract price. Microsoft, on the other hand, declined to comment on this matter.
According to Bloomberg, Microsoft and Oracle announced this collaboration in 2023. At that time, Oracle agreed to provide Microsoft with server access rights to offer computational support for the new AI search engine Bing. Currently, the full amount of this leasing agreement is not yet clear.
At that time, Microsoft rented servers from its main competitor Oracle, which was seen as an early sign of a severe shortage of computing power resources in the AI industry. As the AI business expanded rapidly, Microsoft also signed large-scale computing power leasing agreements with emerging cloud service providers such as CoreWeave, Nscale, and Nebius, committing to invest over $80 billion (Note from IT: the current exchange rate is approximately 534.602 billion RMB) to rent computing resources from external cloud service providers in order to support its own AI business.
However, Microsoft is currently re-evaluating its relevant cooperation strategies. Some key management personnel within Microsoft are dissatisfied with the high costs and project delivery delays of emerging cloud service providers. Before and after deciding not to renew the agreement with Oracle, Microsoft also strengthened its supervision over other data center projects, withdrew from some projects that were considered to be at higher risk, and is internally discussing whether to continue signing new cooperation agreements with emerging cloud service providers.
At the same time, Oracle's cloud computing business has continued to expand since 2023, with large-scale AI contracts from companies such as OpenAI and Meta contributing to its business growth. According to Oracle's financial results for the fiscal year 2026, as of May 31, 2026, the company's cloud business revenue amounted to $33.989 billion (approximately 227.132 billion yuan at current exchange rates), of which cloud infrastructure (IaaS) revenue was $18.09 billion (approximately 120.887 billion yuan), representing a year-over-year increase of 77%.
Meanwhile, Oracle is undertaking large-scale construction of data centers and expanding its cloud computing infrastructure. As capital expenditures continue to rise, the company's free cash flow is under pressure. Oracle's financial data for the fiscal year 2026 shows that its free cash flow was negative $23.7 billion. Investors have also begun to pay more attention to the scale of the company's infrastructure investments and its financial pressures.
After the related news broke, Oracle's stock price fell by about 3%, erasing all of the previous gains during the session. Oracle's stock price had previously reached an annual high of $248.15 on June 1st, after which it continued to decline.
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