Oracle has reportedly dropped its contract with Chinese cloud provider Tencent.

According to the Financial Times, the two parted ways just weeks after signing an agreement that was worth an estimated $7 billion, under which Tencent would have leased some 100,000 advanced AI chips hosted at Oracle data centers in Southeast Asia.

The lease would have enabled Tencent to access Oracle's GPUs in the data centers, which are not available in China due to the US' export controls on the hardware, and was hoped to help Tencent advance its AI models and agentic tools.

According to the FT and citing anonymous sources, following the agreement, US officials approached Oracle to raise concerns. Tencent also received visits from officials in Guangdong, during which it was asked to support domestic Chinese chips.

Oracle, Tencent and the White House have been approached for comment.

The news comes shortly after the FT separately reported that Nvidia had ordered its data center partners to reduce their exposure to Chinese customers.

Sources told the FT that Nvidia has told partners that at least 51 percent of their services must go to customers outside of China. The instructions have reportedly been communicated "verbally" and not written into documentation.

Nvidia said: “Data centers and clouds built on American chips are the foundation that American model and application makers need to compete worldwide. Longstanding US policy encourages every cloud to build on American infrastructure and to win business everywhere they can. America’s longstanding policy has always supported the build-out of American infrastructure worldwide, bringing prosperity, influence, and jobs home.”

While Oracle has reportedly terminated the deal with Tencent, the company maintains major contracts with Chinese company ByteDance, the owner of TikTok. Previously, it was hosting ByteDance in the US, though this has since shifted with Oracle forming part of a consortium that purchased the US operations of the app to continue its operation in the country.

Oracle has a large existing customer base of non-Chinese companies as well, and is a major partner of OpenAI.

Tencent has been of late seeking to expand its capacity, having previously focused on internal use of compute to develop its AI offerings. In May 2026, Tencent CSO James Mitchell said: "Looking through the rest of this year, as the supply of China-designed GPUs progressively ramps up, we'll be remedying that situation; we will be making more capacity available in Tencent Cloud, and consequently driving up Tencent Cloud's rate of expansion. That's where the trade-off has been made: we have been consciously late to monetize the AI opportunity through Tencent Cloud because we've been simultaneously supporting a number of AI initiatives internally."

In August, the company said it was planning to launch a cloud region in Malaysia.

In early 2026, Tencent Cloud's CEO Dowson Tong noted that the company was looking to expand its global footprint, listing the Middle East, Asia Pacific, and Europe as locations where it was seeking to add further availability zones.

Most of Tencent's presence is in Asia, but it also has regions in North America (Silicon Valley, Virginia, Toronto), Europe (Frankfurt), and South America (São Paulo).