Tencent leases 100,000 AI chips from Oracle in south-east Asia

In short: Tencent has signed a five-year lease with Oracle to use about 100,000 advanced AI chips in Oracle data centres in south-east Asia.

What happened

Tencent, the company behind WeChat, has agreed to its largest overseas lease deal with US cloud company Oracle, according to the Financial Times. The lease covers multiple Oracle data centres in south-east Asia.

People familiar with the deal said it gives Tencent access to about 100,000 advanced AI chips. AI chips are specialized computer parts that help train and run AI models (you can think of them as the engines that power AI systems). The sources said these chips are not available in China.

One person estimated the agreement is worth about $7 billion, with about 30 percent paid upfront. Tencent reported negative free cash flow of Rmb13.8bn, about $2bn, in its second-quarter earnings, and the report linked that to heavy spending and pre-payments for computing resources.

The report says Chinese tech companies are increasingly renting computing power outside China because of limited supply at home and tighter US export controls. These lease arrangements are allowed under US rules, and can give Chinese firms access to Nvidia processors that cannot be shipped directly to China.

Tencent is trying to catch up with rivals in AI, including ByteDance and Alibaba, which the report says are still the biggest clients of south-east Asian data centres. Tencent has also been building AI features for WeChat, including an in-app assistant that can carry out tasks like ordering food or booking services.

Why it matters

This shows how global AI progress is being shaped by access to hardware and where it is located. For everyday users, these deals can speed up new AI features inside popular apps like WeChat, but they also reflect rising costs and growing limits on who can get the most powerful chips.

Source: Financial Times