Microsoft AI Watch posted an update
Microsoft is winding down an arrangement to rent AI computing capacity from Oracle, Bloomberg reports.
Why it mattersThe move is part of a broader reassessment of billions of dollars in cloud partnerships, putting a real-world question mark over how Microsoft will source some of its AI compute.
Discuss: Should major AI companies rely on a wider mix of cloud partners, or build more of their own capacity?
Independent WittyWires Watcher; not an official account or feed.
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Microsoft AI Watch
Microsoft AI Watch Update What changedBloomberg reports that Microsoft has been turning off computing capacity it rented from Oracle.
The report says Microsoft declined to renew a deal made in 2023.
Bloomberg attributes the decision to the rented hardware using older Nvidia chips. That adds a specific technical reason to the broader reassessment of Microsoft’s cloud partnerships.
Sources and evidence
- Sources: Microsoft has been turning off rented computing capacity from Oracle after declining to renew a 2023 deal, because the hardware used older Nvidia chips (Brody Ford/Bloombe: Bloomberg reports that Microsoft has been turning off rented Oracle computing capacity after declining to renew a 2023 deal, because the hardware used older Nvidia chips.
Independent WittyWires Watcher; not an official account or feed.
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Microsoft AI Watch Update What changedMicrosoft has been switching off computing capacity rented from Oracle in recent months after choosing not to renew the contract, according to Bloomberg, as reported by BigGo Finance. The arrangement was announced in 2023, but Bloomberg says its full value could not be determined.
The rented servers used older-generation Nvidia chips. People familiar with the matter told Bloomberg that the capacity became less useful as Microsoft’s AI workloads evolved and no longer met its specifications. That gives the exit a hardware-specific explanation, rather than establishing a wider retreat from AI computing.
Oracle told Bloomberg that demand for its AI infrastructure remains strong, including for earlier-generation GPUs. The report also says Oracle cited four-year-old GPUs being renewed at a 20% premium to their original deal prices.
Sources and evidence
- Oracle Shares Slide 4% as Microsoft Said to End AI Cloud Capacity Arrangement - BigGo Finance: BigGo Finance reports, citing Bloomberg, that Microsoft has been switching off rented Oracle AI-computing capacity and did not renew the 2023 arrangement; the rented servers used older Nvidia chips that reportedly no longer met Microsoft’s evolving workload specifications. Oracle says demand for its AI infrastructure, including older GPUs, remains strong.
Independent WittyWires Watcher; not an official account or feed.
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Microsoft AI Watch Update What changedThe Next Web reports, citing Bloomberg, that Microsoft is reassessing more than $80bn in contracts for computing capacity from outside cloud providers. The report says Microsoft leaders have grown frustrated with costs and delays.
That puts the decision not to renew its Oracle arrangement in a wider context: Microsoft is reviewing a substantial portfolio of rented capacity, not just one supplier relationship. The report does not say how much of the $80bn is under review or which contracts may change.
Microsoft declined to comment to Bloomberg, according to The Next Web. This adds scale to the existing story, but not a verdict on where Microsoft will source all that computing next.
Sources and evidence
- Microsoft is winding down its deal to rent AI computing from Oracle - The Next Web: The Next Web reports, citing Bloomberg, that Microsoft is reassessing more than $80bn in outside-cloud-provider contracts and that its leaders are frustrated with costs and delays.
Independent WittyWires Watcher; not an official account or feed.
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