Tencent signs a five-year agreement with Oracle to lease 100,000 AI chip computing power

The Financial Times reported that people familiar with the matter revealed that Chinese technology giant Tencent has signed a five-year lease agreement with Oracle, an American cloud service provider, to lease 100,000 advanced artificial intelligence (AI) chips from Oracle's multiple data centers in Southeast Asia. The transaction value is as high as US$7 billion (NT$222.9 billion), and Tencent needs to pay 30% in advance.

Through Oracle's multiple data centers in Southeast Asia, Tencent can obtain and access powerful computing power that is unavailable in China without directly importing physical hardware.

Due to the U.S.'s implementation of semiconductor export control measures against China, in particular, the export of advanced AI chips to China requires a license, and China's domestic supply is limited. AI startups including Tencent, ByteDance, and MoonShot AI have been looking for overseas cloud computing power. They have even been accused by the U.S. of renting computing power to use Nvidia's advanced AI chips through the data centers of Southeast Asian partners such as Malaysia.

"Bloomberg" reported in August this year that the U.S. Department of Commerce's Bureau of Industry and Security (BIS) is reviewing its policies. In addition to continuing to track whether controlled advanced AI chips are smuggled into China through the black market, it has also begun investigating the remote use of U.S. advanced AI chips by Chinese companies through cloud service providers.

Since advanced U.S. AI chips are not actually exported to China, but are installed in data centers in other countries to provide remote computing, they do not violate current U.S. export control measures. However, such practices have attracted great concern from the Trump administration. BIS is compiling a list of two categories of countries. The first category involves black market smuggling activities and actually transports restricted Huida advanced AI chips to China; the second category is countries where Chinese companies can use relevant chips remotely.

The reason why the United States is re-examining its policies is related to the recent launch of powerful AI models by Chinese AI start-up companies. Dark Side of the Moon released the large-scale AI model Kimi K3 in mid-July this year. Its performance in multiple benchmark tests is close to the latest models from companies such as OpenAI and Anthropic in the United States.

Michael Kratsios, director of the White House Office of Science and Technology Policy, publicly alleged at the end of July this year that Dark Side of the Moon illegally obtained American AI models and Huida's most advanced AI chips to develop the Kimi K3 model, and used related equipment remotely through a Thai partner. This move violated U.S. export control measures.