The artificial intelligence agreement between Oracle and Tencent has been canceled

Oracle’s $7 billion AI chip agreement with Tencent has been called off after pressure from the U.S. government, according to the report. The deal would have supplied the Chinese technology giant with AI chips, but Washington’s intervention halted it before completion. The cancellation underscores how U.S. policy is increasingly shaping cross-border AI infrastructure deals involving Chinese firms. It also highlights Oracle’s exposure to geopolitical constraints as it expands its AI cloud business. What to watch next is whether the two companies renegotiate a smaller or restructured agreement, and whether other U.S.–China AI contracts face similar scrutiny.