Microsoft Ends Deal to Rent Oracle AI Servers

Microsoft is walking away from an arrangement, signed back in 2023, to rent AI computing capacity from rival Oracle ($ORCL) — a deal born when chip scarcity pushed Microsoft to lease servers from a competitor just to keep Bing's AI running. Oracle shares fell 4% after Bloomberg reported the unwind. Microsoft said the rented capacity, worth more than $3 billion in the original lease, had become less useful because it ran on older-generation Nvidia chips that no longer match Microsoft's current specifications. Oracle insists demand for its AI infrastructure, including older GPUs, remains strong, noting it renewed some four-year-old GPU contracts in September at a 20% premium to original pricing.