Microsoft opted not to renew an AI cloud deal with Oracle, CNBC reported. It is putting its own data centres first.
Two people familiar with the matter told CNBC on 6 November that Microsoft would not renew the deal to rent AI computing capacity from Oracle.
Bloomberg reported the plans first. The deal’s value was not disclosed.
CNBC reported that Microsoft is building out its own data centres and shrinking its roster of outside “neocloud” partners. Two sources said Microsoft is in the evaluation stage and has not decided which neoclouds it will stop using. Microsoft has said its capital spending will accelerate in the second half of its fiscal year.
That leaves smaller suppliers exposed to decisions by one large customer. CoreWeave disclosed at its listing that Microsoft accounted for 62% of its 2024 revenue. Shares of CoreWeave, Nebius and IREN are down by roughly half over the past month, even after rallying on Friday, CNBC reported.
Microsoft’s spokesperson said new agreements reflect “what we need today,” describing its strategy as “built on flexibility and choice.” CNBC’s report included no comment from Oracle.
For anyone buying AI capacity, Microsoft’s rising spending is worth separating from its supplier commitments. It can spend more overall while choosing not to renew rented capacity.
Sources
Our file on Microsoft
- 13 Nov
Microsoft's outage cut Outlook and Teams for hours, with about 130,000 Outlook reports. Microsoft said fixes had not brought expected relief.
- 12 Nov
Microsoft's November update for 726 Windows flaws fails to install for some users, The Register reported. Microsoft had not said why.
- 12 Nov
IBM and Microsoft launched a platform promising over 6,000 ready-made AI agents. Gartner found 4% of CIOs implemented plans to adjust roles.
- 11 Nov
Microsoft plans to process Claude inside its EU data boundary by end-2026. Until then it is off by default in the EU.
- 10 Nov
Northern Trust cut client data preparation to three days from two and a half weeks, CIO reported. Staff still check it.
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