Microsoft is scaling back a deal to rent AI computing capacity from Oracle, part of a broader review of its cloud partnerships. According to a Bloomberg report, Microsoft has been phasing out rented computing resources from Oracle after choosing not to renew the contract. The arrangement, which involved older-generation Nvidia chips, no longer aligned with Microsoft’s evolving needs.
Oracle defended its AI infrastructure, stating that demand for its earlier-generation GPUs remains strong. Microsoft did not comment on the report. The move comes as Microsoft reassesses how it secures computing power to maximize its AI investments.
Separately, AI cloud company IREN delayed some infrastructure deliveries after Microsoft requested changes to its network design. This pushed back IREN’s revenue target from year-end to January, with a possible further delay until late February. Earlier reports indicated Microsoft was tightening oversight of data center projects run by neocloud providers due to delays and rising costs.
The Oracle-Microsoft deal, announced in 2023, involved using Oracle Cloud Infrastructure to power the AI-assisted version of Bing. Financial details of the agreement were not disclosed.