Microsoft closes its Oracle deal
Microsoft is winding down a 2023 agreement to rent AI computing power from Oracle after declining to renew it, Bloomberg reported on Friday. The servers covered by the deal ran on older-generation Nvidia chips.
A broader review
The company is reassessing contracts with outside cloud providers worth more than $80 billion in total. This suggests Microsoft may be moving toward a more centralized strategy for procuring AI infrastructure.
What it means
Compute power for training and running AI models is a major competitive battleground among cloud providers. By ending the Oracle deal, Microsoft may be signaling it will lean more heavily on its own data centers and existing partners (such as its relationship with OpenAI). The efficiency of capacity running on older chips may also have factored into the decision.
