Tencent has reportedly signed a $7 billion, five-year cloud deal with Oracle.
- Tencent will lease Oracle data centers in Southeast Asia for five years and gain access to about 100,000 advanced AI chips, the Financial Times reported.
- The $7 billion contract is said to be Tencent’s largest overseas cloud deal.
- The deal could help Oracle diversify beyond OpenAI and ease concerns around its debt-fueled AI infrastructure expansion.
Oracle Corp. (ORCL) shares rose more than 2.5% in overnight trading late Wednesday after a report said Chinese tech giant Tencent has signed a $7 billion deal to lease Oracle’s data centers for artificial intelligence workloads.
The social media and gaming group would lease multiple Oracle data centers in Southeast Asia for five years and gain access to about 100,000 advanced AI chips that are not available in China in a bid to further advance its AI models and agentic tools, The Financial Times reported, citing people familiar with the matter.
The deal is reportedly Tencent’s largest overseas cloud deal to date, with the company set to pay Oracle 30% of the $7 billion contractual fee upfront.
Oracle’s stock shot up on the trending list on Stocktwits after the report, although retail sentiment remained ‘bearish.’
“$ORCL news is not out to all folks. 7B dollars. it is validation more than dollar amount. Let’s go,” a trader posted.
Another wrote: “$ORCL With earnings this strong and several major contracts signed back-to-back, if this thing still can’t rally 10% tomorrow, I honestly don’t know what the hell it takes.”
Chinese Tech Firm Look To Overseas Cloud Capacity
A shortage of domestic computing capacity and tighter U.S. export controls have pushed Chinese tech groups to seek more computing power overseas. Such leases are allowed under current U.S. rules, according to FT, and could give companies access to Nvidia’s advanced processors that are not available in China.
With the latest deal, Tencent is now joining ByteDance and Alibaba, which remain among the biggest data-center clients in Southeast Asia.
Demand for overseas capacity has intensified recently because of U.S. restrictions. They have contributed to higher prices, longer lease terms and larger upfront payments for data-center deals, according to FT.
Confidence Boost For Oracle
Although Oracle reported strong revenue and profit growth in the first quarter and raised its fiscal 2027 forecast last month, concerns remain over its reliance on OpenAI, debt-fueled data center buildout and whether the company can successfully convert its enormous backlog into revenue.
Last week, Oracle invoked a “force majeure” clause tied to Project Jupiter, its $165 billion AI data-center campus in New Mexico. The company reportedly sent a notice to the project’s developer, a unit of Blue Owl Capital (OWL), seeking protection from payments and other costs if the facility is delayed and fails to come online as planned in 2028. The move highlighted potential risks around the massive project and weighed on Oracle shares.
ORCL stock declined 8% last month and is down nearly 30% year to date.
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