Tencent has entered into a five-year agreement to lease approximately 100,000 AI accelerators from Oracle. These computing resources are located in Southeast Asia, allowing the Chinese company to bypass US export restrictions that prevent the acquisition of such hardware within China.
The total value of the contract is estimated at $7 billion. Under the terms of the deal, Tencent is required to pay approximately 30 percent of the total amount as an upfront payment. This expenditure contributed to a negative cash flow of $2 billion for Tencent in the second quarter.
The company is scaling its infrastructure to support its Hunyan AI models, the Xiaowei service, and the WorkBuddy office agent. Tencent's capital expenditures rose by 176 percent year-over-year to $7.9 billion in the second quarter, reflecting a strategic shift toward AI development.
While Tencent is a major client, it is not the largest user of American-powered data centers in the region; Alibaba and ByteDance currently hold that position. The high demand from Chinese firms for these external computing resources is driving up market prices.
