Tencent has secured a deal to lease 100 000 AI chips from Oracle, with the contract valued at $7 billion. The agreement involves renting computing capacity in Oracle data centers located outside of China, specifically in regions such as Singapore and Malaysia.
The estimated hourly cost for the chips is approximately 43 percent lower than the standard market rate for Nvidia H100 GPUs, which was roughly $2.80 per hour for a one-year contract as of August. The deal structure likely involves a 30 percent prepayment by Tencent.
While the specific hardware remains undisclosed, market analysts suggest the pricing aligns with Hopper-class processors. This arrangement allows Tencent to access advanced computing power for AI training, which currently cannot be performed by domestic Chinese hardware.
The deal faces potential regulatory scrutiny. A bill passed by the U.S. House of Representatives aims to regulate remote cloud access to sensitive technology, and the Department of Commerce is reportedly drafting rules to restrict Chinese firms from renting compute in third countries.
Oracle reported $11.4 billion in customer prepayments between June and August, with deferred revenue rising to $30.8 billion. Tencent previously signed a separate agreement for Blackwell chip rentals in Japan and Australia valued at over $1.2 billion.
