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Microsoft winds down AI cloud capacity agreement with Oracle
Microsoft is gradually phasing out an agreement to rent artificial intelligence computing capacity from Oracle. Reports indicate the decision stems from Microsoft’s changing technical requirements, as the rented capacity relied on older generations of Nvidia chips that no longer met the company’s specifications.
While the exact value of the contract remains unconfirmed, one report suggested negotiations for a lease worth over $3 billion stalled due to Oracle’s public cloud lacking necessary FedRAMP federal security certification. Oracle has disputed certain characterizations of these reports, describing the work required for such certification as a massive engineering lift and maintaining that Microsoft remains both a partner and a customer.
Oracle defended the utility of its infrastructure, stating that demand for its AI services remains strong. The company noted that GPU capacity up for renewal in its first fiscal quarter was either renewed or resold to other customers under long-term contracts at prices 20% higher than previous agreements, despite many of the chips being at least four years old.
Entities
Clay Magouyrk · Microsoft · Nvidia · OpenAI · Oracle
Claims
What the coverage asserts, and how many sources carry each claim.
- [○ 1 SOURCE] Negotiations for a lease worth over $3 billion reportedly stalled due to Oracle’s public cloud lacking FedRAMP certification. cryptobriefing.com
- [● 2 SOURCES] Microsoft is winding down an agreement to rent AI computing capacity from Oracle. exame.com · crypto.news
- [○ 1 SOURCE] Microsoft has committed more than $80 billion to computing capacity from outside cloud providers. crypto.news
- [○ 1 SOURCE] Oracle described the work required to achieve FedRAMP certification as a massive engineering lift. cryptobriefing.com
- [● 2 SOURCES] The rented capacity relied on older generations of Nvidia chips that no longer met Microsoft’s specifications. exame.com · crypto.news
- [● 2 SOURCES] Oracle stated that GPU capacity up for renewal in its first fiscal quarter was renewed or resold at a 20% premium. exame.com · crypto.news