Tencent leases 100,000 chips from Oracle for $7 bln- FT
Tencent, the Chinese internet giant, has inked a $7 billion lease agreement with Oracle to access approximately 100,000 advanced artificial intelligence chips, the Financial Times reported on Thursday. This deal, marked as Tencent's largest overseas lease, grants the company access to cutting-edge chips not readily available in China.
The five-year lease spans across multiple Oracle data centers in Southeast Asia, with Tencent agreeing to pay about 30% upfront, which impacted the company's free cash flow during its second quarter earnings. As China's tech firms are barred from purchasing advanced AI chips directly, such leasing agreements under U.S. rules allow them to tap into high-performance Nvidia chips.
Tencent's recent advancements in its Hunyuan AI models have narrowed the gap with domestic leaders like DeepSeek and Alibaba Group, while the company's heavy investments in AI have come at the cost of margins and profitability.
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