According to Bloomberg, Microsoft is gradually phasing out its AI cloud computing rental agreement with Oracle.

Supplemented background information on the midterm elections in the second paragraph

Reuters, November 6 - According to Bloomberg on Friday, citing sources familiar with the matter, Microsoft (MSFT.O) is gradually ending its agreement with Oracle (ORCL.N) regarding the leasing of artificial intelligence computing resources, as part of a comprehensive reassessment of its multi-billion-dollar cloud partnership.

Oracle's share price fell nearly 3% in afternoon trading, while Microsoft’s share price remained largely flat. This week, with the Democratic Party securing a sweeping victory in the midterm elections, market concerns have grown that new data centers may face stricter scrutiny, potentially threatening the rapid growth of the artificial intelligence industry, putting pressure on both companies’ share prices.

Bloomberg reported that after refusing to renew the contract, Microsoft has over the past few months been gradually phasing out the computing capacity leased from Oracle.

The report said that over time, the computing capacity leased by Microsoft lost value as it failed to meet the company’s evolving needs, and noted that Oracle’s hardware uses previous-generation NVIDIA NVDA.O chips.

Neither Microsoft nor Oracle immediately responded to Reuters’ requests for comment.

The report further confirms that Microsoft is reconsidering how to obtain computing capacity in order to fully leverage its massive AI investments.

AI cloud computing company IREN IREN.O said on Thursday that due to Microsoft requesting changes to its network design, it had postponed the delivery of part of its infrastructure.

As a result, IREN pushed back its goal of bringing online annualized revenue capacity of more than $4 billion from the end of the year to January, with a possible further delay to late February.

(To assist those whose native language is not English, Reuters has automated translations of its reports into various other languages. Automated translation may contain errors or lack necessary context, so Reuters does not guarantee the accuracy of automated translations, which are provided for reader convenience only. Reuters accepts no responsibility for any damage or loss arising from the use of automated translation.)