Nov 6 (Reuters) – Microsoft is winding down an arrangement to rent AI computing from Oracle as part of a larger reassessment of billions of dollars in cloud partnerships, Bloomberg News reported on Friday, citing people familiar with the matter.
Oracle shares fell nearly 3% in afternoon trading, while Microsoft was little changed. Both stocks have come under pressure this week after a Democratic midterm election sweep raised worries of tighter scrutiny of new data centers, which could threaten the AI industry’s breakneck expansion.
The Bloomberg report said Microsoft had been turning off rented computing capacity from Oracle in recent months after declining to renew the contract.
Over time, the computing capacity Microsoft was renting became less valuable as it no longer met the company’s evolving needs, the report said, noting that the Oracle hardware used an older generation of Nvidia chips.
Microsoft and Oracle did not immediately respond to Reuters’ requests for comment.
The report adds to signs that Microsoft is rethinking how it secures computing capacity to get more out of its massive AI investments.
AI cloud company IREN said on Thursday it had delayed some infrastructure deliveries after Microsoft requested changes to its network design.
The move pushed back IREN’s target for bringing more than $4 billion in annualized revenue capacity online from year-end to January, with a possible further delay until late February.
(Reporting by Anzar Mehraj in Bengaluru; Editing by Joyjeet Das, Jonathan Ananda and Maju Samuel)
