Tencent has entered into a five-year agreement to lease 100,000 AI chips from Oracle. The hardware will be hosted in Oracle’s data centers across Asia, allowing the Chinese tech giant to scale its computing capacity without the need to construct its own server farms.
This partnership aligns with Oracle's broader cloud expansion. In its Q1 FY27 results, Oracle reported the delivery of over 300,000 GPUs to cloud customers since the previous quarter. The company also noted that older GPUs are being resold or renewed at a premium of approximately 20%.
Oracle currently holds uncommenced lease commitments for data centers and cloud infrastructure valued between $248 billion and $288 billion, with typical terms spanning 15 to 19 years. Meanwhile, average customer agreements, including the Tencent deal, last 5 to 6 years.
Tencent joins other major clients like OpenAI and ByteDance, the latter of which utilizes Oracle's infrastructure for AI hubs in Singapore. The strategy allows Tencent to avoid significant upfront capital expenditures while maintaining flexibility as AI hardware technology evolves.
