Microsoft is winding down a deal to rent AI computing capacity from Oracle, Bloomberg reported Friday, Nov. 6, and Oracle shares fell on the news.
Microsoft has been turning off capacity rented from Oracle in recent months after declining to renew the contract, according to people familiar with the matter cited by Bloomberg. The hardware used older-generation Nvidia chips and no longer fit Microsoft's specifications, Markets Insider reported.
The stock move: Oracle shares were down about 5% to $109.68 after the report, according to Markets Insider; Investing.com put the drop at 4%.
Both sides
Microsoft declined to comment. An Oracle spokesperson said demand for its AI infrastructure remains strong, including for earlier-generation GPUs, Investing.com reported. Oracle said in September that it was renewing contracts for four-year-old GPUs at a 20% premium.
Background: The deal, announced in 2023, helped power the AI version of Microsoft's Bing search. Its value was not disclosed. The report came a day after a broad tech selloff in which the Nasdaq fell 5.5%, according to Investing.com.
Related: Oracle's AI World announcements.