Microsoft Is Winding Down Its Deal to Rent AI Cloud Capacity From Oracle

Microsoft is winding down an arrangement to rent AI computing from Oracle as part of a larger reassessment of billions of dollars in cloud partnerships, Bloomberg News reported on Friday, citing people familiar with the matter.

The move is the latest sign that Microsoft is rethinking how it buys computing power for artificial intelligence, as the cost of the AI buildout comes under closer scrutiny.

Microsoft has also been tightening oversight of some data-center projects from neocloud providers. It will not exercise the option to more than double its existing agreement with Nscale for a Texas data center, and it pulled out weeks ago of a deal to anchor Nscale's flagship data center in Loughton, Essex, after power-connection delays.

Shares of neocloud providers fell after that report, with Nebius and IREN down more than 13% and CoreWeave down 11%.

Sources

• Reuters — Microsoft is winding down Oracle deal to rent AI cloud capacity, Bloomberg News reports
• Innopark IT — Microsoft Tightens Oversight of Neocloud Data Center Projects as Shares Slide