MS reportedly scales back use of Oracle AI cloud capacity rental contract

Microsoft ($MSFT) has reportedly declined to renew and is scaling back its lease of AI cloud computing capacity from Oracle ($ORCL), though the contract's total size and the scale of the reduction were not disclosed, and there is no basis to apply the $3 billion-plus figure floated in earlier lease negotiations. The reduced usage is tied to older Nvidia chips in the leased capacity that no longer match Microsoft's revised technical specifications and have become less utilized. An Oracle spokesperson said demand for its AI infrastructure, including older GPUs, remains strong. The pullback matters because it signals a major AI buyer re-evaluating older hardware as it reshapes its compute sourcing, with implications for Oracle's cloud backlog and Nvidia's legacy GPU demand. What to watch next is whether other large AI customers follow Microsoft in trimming older-capacity leases and how Oracle's AI infrastructure bookings hold up.