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. 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.

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