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Tencent scores 100,000 offshore AI chip deal with Oracle for $7 billion despite climbing prices
Neither company has said which chips Tencent is renting.
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Oracle has reportedly made a deal with Tencent for a five-year lease at several Oracle data centers in Southeast Asia, covering about 100,000 advanced AI chips unavailable in China. The deal is estimated to be worth about $7 billion, which would come out to about $1.60 per chip per hour over five years, with about 30% upfront, according to a report by the Financial Times (FT). The deal lands as compute rental prices continue to climb, per Chief Strategy Officer James Mitchell on Tencent’s August 12 earnings call. Neither company has commented on the report, but such leases are legal under current U.S. rules, per the FT.
The estimated chip-hour price is around 43% less than the roughly $2.80 per GPU-hour for Nvidia’s H100 with a one-year contract, per research firm SemiAnalysis in August. It’s also about 48% lower than the $3.09 per GPU-hour for a three-year contract with Nvidia’s B200, per a 2025 filing by Japanese data center operator Datasection for an unnamed customer. Market trends have pricing running the other way, with the FT reporting longer terms and larger upfront payments for such leases. Tencent president Martin Lau said on the same call the company could sell its existing orders at “more than 30% profit” compared to what it “paid just a few months ago.”
No chips are named. The FT says that such leases could reach even Nvidia’s top processors, but that does not mean this deal involves Nvidia hardware. One-year H100 contracts on SemiAnalysis’s index were above the estimated rate at about $1.70 per GPU-hour even as of October 2025, with the B200 rate being even more expensive despite its longer, three-year term. Going by raw B200 server costs, which exclude buildings, power, networking, and financing, 100,000 B200s would cost $5.44 billion, or about 78% of the reported value, based on Datasection’s 2025 purchase of servers with 5,000 B200s for $272 million.
Without specifics on the hardware being rented, it is not possible to determine whether this is a bulk deal or if the leasing costs are closer to the actual hardware cost. The pricing on paper, however, better fits Hopper-class at volume. Hopper would include the H100 and H200 and, with H200 imports still limited, could meet the criterion of the chips in the deal not being available in China.
The Oracle data centers are located outside China, with Tencent merely renting time on them. Details including the countries involved, sites, and start date remain undisclosed. Oracle has two Singapore cloud regions, with a Malaysia one announced. The FT says the biggest clients of Southeast Asian data centers are ByteDance and Alibaba, with Chinese firms using the capacity especially for AI training, which domestic chips cannot yet do. Tencent previously inked a $1.2 billion-plus deal for Datasection Blackwell rentals in Japan and Australia, the FT reported in December 2025.
Some Oracle clients have prepaid for GPUs or brought their own hardware since its March call, and fiscal Q4, from March to May, added $67 billion of AI contracts, mostly of those two kinds, per its June call. June through August, per its quarterly filing, the company “received $11.4 billion of prepayments from customers that included a significant financing component.” Deferred revenue rose from $15.4 billion to $30.8 billion over the quarter. No customers were named, so this can’t be tied to Tencent. The company reported 97.9% GPU utilization during its September 10 earnings call, with renewals at a 20% average premium, which was mostly on GPUs four years or older.
Tencent prepaying about 30% makes sense given Oracle’s statements earlier this year. It’s a good deal for both parties. Oracle would improve its cash flow following a quarter of negative free cash flow, and Tencent Cloud’s May price raises, per Mitchell, could help recoup the c