Tencent Signs $7 Billion Oracle AI Chip Lease Deal

Tencent has signed a $7 billion agreement with Oracle to access roughly 100,000 advanced artificial intelligence chips, marking a major expansion of the Chinese technology giant’s AI infrastructure, according to the Financial Times.

The five-year lease covers multiple Oracle data centers across Southeast Asia and represents Tencent’s largest overseas leasing agreement to date, the report said, citing people familiar with the matter.

Under the agreement, Tencent will gain access to about 100,000 advanced AI chips that are unavailable for direct purchase in China. The deal reportedly requires an upfront payment of around 30%, contributing to pressure on Tencent’s free cash flow during its second-quarter earnings period.

The investment comes as Tencent accelerates efforts to strengthen its AI models and compete with other leading Chinese artificial intelligence developers, including DeepSeek and Alibaba. Tencent has also been integrating AI capabilities across its extensive product ecosystem, including its widely used WeChat platform.

Chinese technology companies face U.S. restrictions that prevent them from directly purchasing some of the most advanced AI semiconductors. However, current U.S. rules allow companies to lease access to such computing infrastructure outside China, enabling firms such as Tencent to use advanced Nvidia chips through overseas data centers.

Tencent’s Hunyuan AI models have shown significant improvements in recent months, narrowing the performance gap with some of China’s leading domestic models. The Oracle agreement could provide the computing capacity needed to train and operate increasingly sophisticated AI systems.

The deal also underscores Tencent’s willingness to spend heavily on artificial intelligence despite the potential impact on margins, profitability and cash flow. The company has substantially increased AI-related investment over the past year as competition among Chinese technology companies intensifies.

For Oracle, the agreement highlights growing demand for its cloud data center infrastructure as global technology companies seek access to the computing power required for AI development and deployment.