Microsoft winds down Oracle AI cloud deal as older chips fall short

Microsoft has begun winding down an agreement to rent AI computing capacity from Oracle after deciding not to renew a contract involving older Nvidia chips that no longer met its requirements. Summary Microsoft has been switching off rented Oracle computing capacity in recent months, according to Bloomberg. Oracle says older GPU capacity was renewed or resold at a 20% premium. Microsoft committed more than $80 billion to computing capacity from outside cloud providers. The pullback follows growing concerns inside Microsoft over suppliers’ costs and delivery delays. In a Nov. 6 report citing people familiar with the matter, Bloomberg said Microsoft had been turning off Oracle capacity after declining to renew the agreement. The rented computing resources had become less useful as Microsoft’s specifications changed, the people said. The arrangement dates to 2023, when Oracle agreed to supply servers supporting Microsoft’s AI-powered Bing search engine. Bloomberg could not determine the full size of the contract, and Microsoft declined to comment. Oracle defends demand for older AI chips Oracle responded by saying demand for its AI infrastructure remained strong, including for earlier...