FT: Tencent signs $7bn Oracle cloud deal for 100,000 AI chips

October 1, 2026 at 08:55 AM2 min

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Tencent has signed a $7 billion cloud leasing deal with Oracle, gaining access to about 100,000 advanced AI chips unavailable in China. The agreement contributed to Tencent's first negative quarterly cash flow in over a decade, at $2 billion. The deal comes as Tencent's AI infrastructure spending rose 176% year-on-year to $7.9 billion in the second quarter.

Key Facts

Tencent's deal with Oracle is valued at approximately $7 billion with a prepayment of about 30%.
The agreement gives Tencent access to about 100,000 advanced AI chips that are unavailable in China.
Tencent's AI infrastructure spending and prepayments for computing resources rose 176% year-on-year to $7.9 billion in the second quarter.
The deal contributed to Tencent's first negative quarterly cash flow in over a decade, at $2 billion.
US President Donald Trump said in late September that the US leads China in AI by 1–1.5 years.

The Oracle Deal

Tencent signed its largest-ever cloud leasing agreement with US cloud provider Oracle, according to Financial Times sources. The deal is valued at about $7 billion with a prepayment of around 30%, one source told FT. The agreement gives Tencent access to roughly 100,000 advanced AI chips that are not available in China. FT reported that the deal contributed to a negative cash flow of $2 billion in Tencent's financial statements. This was Tencent's first negative quarterly cash flow figure in more than a decade.

AI Spending Surge

Tencent's spending on AI infrastructure and prepayments for computing resources rose 176% year-on-year in the second quarter to $7.9 billion. The shortage of domestic supply and tightening US export controls have pushed Chinese companies to seek more computing power abroad. Such leasing deals can give Chinese businesses access to advanced Nvidia chips that are unavailable in China. Tencent is also integrating AI agents into its ecosystem, particularly in the WeChat app. Tencent's AI models show significant performance improvements, narrowing the gap with leading domestic models such as Alibaba's Qwen.

US-China AI Race

In late September, US President Donald Trump said that working with Chinese President Xi Jinping on AI regulation could harm American companies. Trump stated that the US leads China in AI by 1–1.5 years. He said, "We are maybe a year, maybe a year and a half ahead of China. There is no third place. It's just us and China. We lead by a pretty big margin." Trump has previously said that the winner of the AI race will gain a decisive advantage on the world stage. When asked about risks from rapid AI development raised by industry leaders such as OpenAI CEO Sam Altman, Trump said he was "not concerned."