Microsoft Winds Down Oracle AI Computing Agreement

Microsoft is winding down its use of Oracle’s AI computing capacity after declining to renew a multiyear agreement, according to reporting that cited people familiar with the matter. The rented servers reportedly ran on older-generation Nvidia chips that no longer matched Microsoft’s requirements. Microsoft has not publicly confirmed the nonrenewal and declined to comment.

The capacity had supported AI features for Bing conversational search. Oracle announced the arrangement on November 7, 2023, saying its Oracle Cloud Infrastructure and Microsoft’s Azure would support AI inference for Bing. Oracle’s announcement did not disclose the agreement’s financial value or capacity, and the contract’s overall scale has not been established in the subsequent reporting.

According to the account of the wind-down, Microsoft had been switching off the rented capacity in recent months. The reports did not identify a specific Nvidia chip model or quantify the financial effect on either company. The reported hardware mismatch reflects Microsoft’s changing computing requirements, but the company has not publicly stated its reason for ending the arrangement.

Oracle responded that demand for its AI...