Tencent Signs US$7 Billion Offshore AI-Computing Deal

Tencent has signed a five-year agreement with Oracle to lease access to about 100,000 advanced AI chips that are not currently available to the Chinese company domestically, in a deal valued at roughly US$7 billion, the Financial Times reported.

Under the agreement, Tencent will pay about 30 percent of the contract value upfront. The chips will be installed across several Oracle data centers in Southeast Asia, allowing Tencent to secure additional computing capacity outside China as demand for artificial-intelligence infrastructure continues to rise.

The agreement is Tencent's largest overseas chip-leasing deal to date, according to the report. It also represents a sizable commitment to external computing capacity as the Chinese technology group expands development of large language models and other generative-AI products.

Tencent has been increasing its AI investments across cloud services, foundation models and consumer-facing applications. The company recently previewed an AI image-generation tool aimed at professional creators, offering both text-to-image and image-to-image functions.

Access to advanced AI chips has become a key constraint for Chinese technology companies as US export controls restrict the sale of some high-end processors to China. Leasing computing capacity through overseas data centers has emerged as one way for Chinese companies to gain access to more powerful hardware without directly importing the chips.

Neither Tencent nor Oracle commented to Reuters on the reported agreement.