Microsoft winds down Oracle computing deal, people familiar say
Microsoft declined to renew the contract and has been switching off rented capacity, Bloomberg says, as the company reassesses its cloud partnerships.
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Microsoft declined to renew the contract and has been switching off rented capacity, Bloomberg says, as the company reassesses its cloud partnerships.
Microsoft has declined to renew a contract for superintelligence (SI) computing capacity from Oracle and has been switching off the rented capacity in recent months, Bloomberg said on 6 November, citing people familiar with the matter. The move is part of a wider reassessment of cloud partnerships, Reuters said in its account of Bloomberg’s reporting.
Oracle announced a multiyear computing agreement with Microsoft on 7 November 2023. Oracle said Microsoft was using its Oracle Cloud Infrastructure alongside Microsoft Azure to run models for Bing conversational search and support growing demand.
The rented capacity became less valuable because it no longer met Microsoft’s changing needs, Bloomberg said. It also said the Oracle hardware used an older generation of Nvidia chips. Microsoft and Oracle did not immediately respond to Reuters' requests for comment.
The 2023 announcement described model inference: the use of a trained model to generate predictions or decisions. Microsoft said at the time that using Oracle’s infrastructure alongside Azure would expand customer access and speed up many Bing search results.
Oracle said inference models require tens of thousands of graphics processing units, or GPUs, capable of operating in parallel as a single supercomputer over a high-capacity network.
On 5 November, cloud computing company IREN said it had delayed some infrastructure deliveries after Microsoft requested changes to its network design. The changes pushed IREN’s target for bringing more than $4 billion in annualized revenue capacity online from year-end to January, with a possible further delay until late February.
Oracle shares fell nearly 3% in afternoon trading, while Microsoft shares were little changed, Reuters reported. Both stocks had come under pressure during the week after a Democratic midterm election sweep raised concerns that tighter scrutiny of new data centres could threaten the AI industry’s rapid expansion.
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