Microsoft is winding down a 2023 agreement to rent AI computing capacity from Oracle, a US-based cloud and database software company, after deciding not to renew the contract, according to people familiar with the matter.

The capacity had become less useful because it no longer fit Microsoft’s specifications, the people said. The Oracle hardware used older-generation Nvidia chips.

Oracle said demand for its AI infrastructure remained strong, including for older graphics processing units. The company said in September that it was renewing contracts for four-year-old GPUs at a 20% premium to the original deal price.

The deal was intended to help support an AI version of Bing. The wind-down comes as Microsoft reviews its external computing capacity after committing more than US$80 billion to cloud providers.

Oracle reported US$18 billion in cloud revenue for the year ended May 2026.

🔗 Source: Bloomberg

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