Oracle has reportedly nixed a $7 billion deal to lease computer chips to Chinese tech giant Tencent after getting pushback from the Trump administration.
The deal struck by Oracle and its billionaire chairman Larry Ellison would have provided Tencent with access to up to 100,000 AI chips located at Asia-based data centers over a five-year term.
Ordinarily, Tencent would be barred from accessing the advanced chips due to US export controls.
Trump administration officials told Oracle they were concerned about the arrangement – which comes as the US and China are locked in a winner-takes-all race for AI dominance – and it was ultimately canceled, the Financial Times reported, citing two sources with knowledge of the matter.
Separately, Chinese government officials reportedly pressured Tencent to use domestic computer chips rather than Western counterparts, the report said.
Representatives for Oracle, Tencent and the White House did not immediately return requests for comment.
Oracle is known for its close ties to China-based ByteDance. The California-based firm was part of the group of US investors that acquired the majority of TikTok’s US operations last year in a deal brokered by the White House. Ellison himself is a major Trump ally.
US export rules prevent the sale of the most advanced AI chips from Nvidia to Chinese firms. As a result, Tencent and other Chinese firms have sought deals to lease chip capacity from overseas data centers.