Tencent rents 100,000 AI chips from Oracle, the FT reports

Tencent has agreed a five-year lease for about 100,000 advanced AI chips in several Oracle data centres in south-east Asia, its largest overseas lease, the Financial Times reported on 30 September 2026, citing unnamed sources, according to Reuters. The deal is estimated at about $7 billion, with about 30% paid upfront.

Reuters could not immediately verify the report, and Oracle and Tencent did not immediately respond to its requests for comment. Tencent, the Chinese company whose Weixin and WeChat messaging apps had 1.44 billion monthly users at the end of June, has sharply raised its own spending on computing this year: its capital expenditure was up 176% on a year earlier in the second quarter.

What did the FT report?

The FT reported on 30 September 2026 that Tencent agreed this year to a five-year lease across several Oracle data centres in south-east Asia, giving it access to about 100,000 advanced AI chips, Reuters said. The FT described the chips as ones that were not available in China, and the lease as Tencent’s largest overseas lease deal, according to Reuters, which carried the report the same day.

The deal reflects how fast Tencent’s computing needs are growing as it invests in developing and deploying large language models, Reuters said. Chinese companies have been racing to secure AI chips as US export curbs tighten and Beijing promotes home-grown alternatives to US technology providers, Reuters added. Our page on US chip export rules sets out how sales of advanced chips to Chinese companies are licensed.

How much would Tencent pay?

The lease is estimated at about $7 billion over five years, with about 30% paid upfront, the FT reported: roughly $2.1 billion at the start, by our arithmetic. Spread over the term, the total averages about $1.4 billion a year, or about $70,000 a chip across the five years.

Tencent’s April to June capital spending nearly tripled

Tencent’s capital expenditure was RMB52.8 billion in the second quarter of 2026, about $7.87 billion at the Federal Reserve’s H.10 rate of 6.7110 yuan per dollar for 25 September, up 176% on a year earlier, its results of 12 August show. “At the infrastructure level, we substantially stepped up our procurement of compute,” said Ma Huateng, Tencent’s chairman and chief executive.

Tencent’s quarterly capital expenditure has risen for three quarters running, from RMB13.0 billion ($1.93 billion) in July to September 2025. The second quarter alone came to two-thirds of the RMB79.2 billion ($11.80 billion) of capital expenditure Tencent reported for the whole of 2025 in its annual results. The second-quarter figure also equalled about a quarter of Tencent’s revenue for April to June, RMB204.8 billion ($30.52 billion).

Tencent’s free cash flow for the quarter was negative RMB13.8 billion ($2.06 billion) after large AI-related prepayments for computing; excluding the prepayments for compute procurement it would have been RMB37.6 billion ($5.60 billion), Tencent said. The prepayments support its Hy models, the WorkBuddy and CodeBuddy tools, AI in Weixin and growing outside demand for its cloud services. Tencent released the full production version of its Hy3 model in July 2026 and published the Hy4 preview on 27 August 2026.

On Tencent’s balance sheet, prepayments for capital assets, services and computer components stood at RMB81.1 billion ($12.09 billion) on 30 June 2026, up from RMB14.1 billion ($2.09 billion) at the end of 2025, its interim report shows. Its net cash fell to RMB58.2 billion ($8.67 billion) at 30 June from RMB146.9 billion ($21.88 billion) three months earlier, mainly reflecting capital expenditure payments of RMB59.3 billion ($8.84 billion) and 2025 dividend payments of RMB41.6 billion ($6.20 billion) made in the quarter, Tencent said.

Oracle has delivered more than 300,000 GPUs since May

Oracle said on 10 September 2026 that it had delivered more than 300,000 GPUs to its AI cloud customers since the end of its fiscal fourth quarter on 31 May, almost triple the capacity it delivered in that quarter. “Customer demand for AI Cloud Training and Inferencing Services continues to grow faster than supply,” Oracle said in its results.

The FT report places the lease in several Oracle data centres in south-east Asia. Oracle’s public cloud regions there are two in Singapore, one at Batam in Indonesia and one at Kulai in Malaysia, according to its region list, and the Kulai region opened on 2 February 2026.

Oracle raised $19.9 billion in the quarter by selling 141 million new shares through its at-the-market programme, and it had $288 billion of data-centre lease commitments, for terms of 15 to 19 years, due to start between late 2026 and its 2029 fiscal year, which sat off its balance sheet at 31 August, its quarterly filing shows. Oracle expects capital expenditure for its fiscal year to May 2027 to be higher than the year before, as it adds capacity and opens data centres in new locations, the filing says.