Microsoft is winding down its 2023 deal to rent AI computing from Oracle, Bloomberg reports, and CNBC says it will use fewer GPU cloud suppliers

Microsoft is winding down an arrangement to rent AI computing from Oracle, as part of a wider review of its cloud partnerships, Bloomberg News reported on 6 November, according to Reuters. Bloomberg said Microsoft had stopped renewing the contract and has been switching the capacity off in recent months, partly because the Oracle hardware used an older generation of Nvidia chips, Reuters reported.

Oracle announced the multi-year deal in 2023, saying Microsoft would use its AI infrastructure for the AI-assisted version of Bing, Reuters reports. Its financial terms were not disclosed. An Oracle spokesperson told Reuters that demand for Oracle Cloud Infrastructure's AI capacity “remains strong”, including for earlier-generation GPUs.

CNBC, citing two people familiar with the matter, separately reported that Microsoft opted not to renew a deal with Oracle and is cutting back the number of “neocloud” partners it uses, among them CoreWeave, Nebius, Chronoscale, IREN, Lambda and Nscale. CNBC's sources say Microsoft plans to rely on a few key suppliers while building more of its own data centres, and has not yet chosen which partners to drop. A Microsoft spokesperson told CNBC its strategy is “built on flexibility and choice”.

The report came a day after IREN said Microsoft had asked for changes that delay capacity it had handed over, which the Switchboard ran on 6 November. GPU cloud companies have borrowed heavily against contracts with large customers such as Microsoft, so a shift by their biggest renter matters for how they are financed.

• Reported Microsoft is winding down its arrangement to rent AI computing from Oracle and has been switching the capacity off, Bloomberg News reported, according to Reuters. Reuters, via MarketScreener, citing Bloomberg
• Reported Microsoft opted not to renew a deal with Oracle and plans to use fewer neocloud partners, CNBC reports, citing two people familiar with the matter. CNBC
• Claimed Oracle says demand for its cloud's AI infrastructure remains strong, including for earlier-generation GPUs. Reuters, via MarketScreener