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China’s Tencent has signed a five-year agreement with US cloud provider Oracle to access about 100,000 advanced artificial intelligence chips, the
Financial Times reported, as the technology giant expands computing capacity for its growing AI operations.
The deal, reached this year, covers multiple Oracle data centres in Southeast Asia and is estimated to be worth about $7 billion, according to the report. About 30% of the value is expected to be paid upfront. Reuters said it could not independently verify the report, while Tencent and Oracle did not immediately respond to requests for comment.
The agreement would give Tencent access to advanced AI chips that are not available in China. The reported arrangement comes as Chinese technology companies face rising demand for computing power to train and deploy large language models, AI agents and other advanced systems.
Tencent has been increasing its investment in artificial intelligence as it develops new models and AI-powered tools.
The Oracle deal also comes amid tighter US restrictions on exports of advanced semiconductor technology to China. At the same time, Beijing is encouraging the development of domestic alternatives, increasing pressure on Chinese technology companies to secure the computing resources needed for increasingly demanding AI workloads.
The Financial Times reported that Tencent’s AI spending contributed to negative free cash flow of 13.8 billion yuan ($2 billion) in the second quarter, its first negative quarterly figure in more than a decade. The company’s capital expenditure rose 176% year on year to 53 billion yuan during the quarter, with AI infrastructure and computing resources accounting for part of the spending, according to the report.
Tencent is also expanding AI capabilities across its broader technology ecosystem. Its Hunyuan family of models is being developed alongside AI agents and productivity tools, while the company is integrating AI features into services including WeChat.
The reported lease highlights the growing scale of computing infrastructure required by major technology companies developing advanced AI systems.
The agreement also underscores the increasing importance of AI chips, data centres and access to computing power in the global artificial intelligence industry.
The deal, reached this year, covers multiple Oracle data centres in Southeast Asia and is estimated to be worth about $7 billion, according to the report. About 30% of the value is expected to be paid upfront. Reuters said it could not independently verify the report, while Tencent and Oracle did not immediately respond to requests for comment.
The agreement would give Tencent access to advanced AI chips that are not available in China. The reported arrangement comes as Chinese technology companies face rising demand for computing power to train and deploy large language models, AI agents and other advanced systems.
Tencent has been increasing its investment in artificial intelligence as it develops new models and AI-powered tools.
The Oracle deal also comes amid tighter US restrictions on exports of advanced semiconductor technology to China. At the same time, Beijing is encouraging the development of domestic alternatives, increasing pressure on Chinese technology companies to secure the computing resources needed for increasingly demanding AI workloads.
The Financial Times reported that Tencent’s AI spending contributed to negative free cash flow of 13.8 billion yuan ($2 billion) in the second quarter, its first negative quarterly figure in more than a decade. The company’s capital expenditure rose 176% year on year to 53 billion yuan during the quarter, with AI infrastructure and computing resources accounting for part of the spending, according to the report.
Tencent is also expanding AI capabilities across its broader technology ecosystem. Its Hunyuan family of models is being developed alongside AI agents and productivity tools, while the company is integrating AI features into services including WeChat.
The reported lease highlights the growing scale of computing infrastructure required by major technology companies developing advanced AI systems.
The agreement also underscores the increasing importance of AI chips, data centres and access to computing power in the global artificial intelligence industry.
