Microsoft Is Said to Wind Down Oracle AI Cloud Rental as Older Chips No Longer Fit

What happened

Bloomberg reported on Nov 6, citing people familiar with the matter, that Microsoft has been turning off rented Oracle capacity in recent months after declining to renew the contract; the rented computing capacity became less valuable over time as it no longer met Microsoft's evolving needs. The move is part of a larger reassessment of billions of dollars in cloud partnerships, the report said; the full value of the deal could not be determined, and Microsoft declined to comment.

The rental dates to 2023, when Oracle announced a multiyear agreement for Oracle Cloud Infrastructure (OCI) to power the AI-assisted version of the Bing search engine, with the two clouds linked through Oracle Interconnect for Microsoft Azure; financial terms were never disclosed. The hardware involved used an older generation of Nvidia chips, according to the report, which did not identify a specific model; the rental is distinct from the companies' database partnership, so the non-renewal is not an end to every Microsoft–Oracle relationship.

Oracle pushed back: a spokesperson said demand for OCI's AI infrastructure "remains strong," including for earlier-generation GPUs, and the company said on its Sept 10 earnings call that GPU capacity up for renewal in its fiscal first quarter was renewed or resold at a 20% premium to prior pricing under long-term contracts. Oracle shares fell as much as about 5% intraday after the report, then pared losses, according to reports. Earlier the same day, AI cloud operator IREN said in its results that Microsoft had asked for changes to its network design, delaying some infrastructure deliveries.

Key facts

1. Reported by: Bloomberg, Nov 6, 2026, citing people familiar with the matter; Microsoft declined to comment
2. What is happening: Microsoft is winding down AI computing capacity rented from Oracle, declining to renew the 2023 contract, and has been turning off the rented capacity in recent months
3. Reason: the rented capacity no longer met Microsoft's evolving needs, according to the report; the hardware used an older generation of Nvidia chips, with no specific model identified
4. Context: the move is part of a larger reassessment of billions of dollars in cloud partnerships, the report said; the full value of the deal could not be determined
5. The deal's origin: Oracle announced the multiyear agreement in 2023, with OCI powering the AI-assisted Bing search engine; financial terms were never disclosed
6. Oracle's response: a spokesperson said demand for OCI's AI infrastructure "remains strong," including for earlier-generation GPUs
7. Resale pricing: Oracle said on its Sept 10 earnings call that GPU capacity up for renewal in its fiscal first quarter was renewed or resold at a 20% premium to prior pricing under long-term contracts
8. Market reaction: Oracle shares fell as much as about 5% intraday after the report, then pared losses, according to reports
9. Related the same week: AI cloud operator IREN said on Nov 5 that Microsoft's requested network-design change delayed some infrastructure deliveries; IREN said the slip carries no financial penalties
10. Scope: the rental is distinct from the companies' database partnership; the report did not say all Microsoft–Oracle cooperation is ending