Tencent leases 100,000 AI chips from Oracle in $7B deal
What's the story
Chinese tech giant Tencent has signed a major deal with US cloud provider Oracle. The agreement, reported by the Financial Times, is for the lease of some 100,000 advanced artificial intelligence (AI) chips that are not available in China. The deal is said to be worth about $7 billion over five years and includes an upfront payment of roughly 30%.
Strategic move
The deal highlights Tencent's growing AI needs
The chip leasing deal with Oracle underscores Tencent's growing computing needs for its AI expansion.
The company has been heavily investing in the development and deployment of large language models.
Recently, Tencent also unveiled a preview version of a new AI image-generation model for professional creators, which offers text-to-image and image-to-image capabilities among other features.
Market competition
Chinese companies are racing to secure AI chips
As the regulatory landscape changes, Chinese companies are racing to acquire AI chips.
The move comes as a response to tightening US export restrictions and China's push for home-grown alternatives to American technology providers.
The competition among these companies shows how important access to advanced AI chips is in today's tech market.