Oracle has cancelled a $7 billion AI chip leasing contract with the Chinese tech giant Tencent under pressure from the Trump administration, according to the Financial Times.

Citing sources with knowledge of the deal, the FT reported that the deal would have seen Oracle lease up to 100,000 AI chips to Tencent over a five-year period. The chips in question, which are not available in China, are based in data centres throughout south-east Asia, the people added.

Two people familiar with the matter told the FT that officials from the Trump administration had directly approached Oracle with concerns over the deal. One of these sources also told the FT that Chinese officials had separately urged Tencent to support domestic chipmakers rather than Western competitors.

In previous reporting, the FT said that Tencent had agreed to pay around 30 per cent of the approximate $7 billion at which the deal was valued up front.

It is unclear whether any payment has been made towards the deal, which is now understood to have been cancelled altogether.

Tencent is China’s largest tech company and the world’s largest video game company, with a revenue of 751.766 billion Chinese yuan ($109.4 billion) in 2025.

Despite its standing and market share, it has fallen behind rivals in the AI space, with Alibaba’s Qwen now one of the leading open-source AI models and smaller firms such as DeepSeek and Moonshot AI having released frontier models of their own.

The Chinese government has repeatedly urged AI labs in the country to use domestic chips made by the tech giant Huawei. However, with the AI ecosystem largely built on Nvidia’s proprietary Cuda platform and Huawei struggling to meet local demand, reducing reliance on the American company has been difficult.

Without access to the latest Nvidia chips, prominent Chinese firms have turned to leasing data centre capacity in south-east Asia. Oracle has several deals with Alibaba and ByteDance, for example.

US officials have repeatedly worked to limit China’s access to the most advanced AI chips and warned that Chinese developers are smuggling GPUs into the country. In July, Nvidia halved its list of approved Asian customers citing smuggling concerns and this week ordered its data centre partners to reduce their exposure to China.

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