Microsoft is shutting down rented Oracle AI capacity after declining renewals; its older-generation NVIDIA GPUs no longer meet Microsoft’s specifications.

The reported reduction concerns a particular rented infrastructure arrangement. Reports citing people familiar with the matter said Microsoft declined renewals and progressively switched off Oracle-provided capacity over recent months. The servers used older-generation NVIDIA graphics processing units (GPUs) that no longer met Microsoft’s specifications; the sources do not identify their model or number.

The arrangement began in 2023 to support the AI-enabled Bing search engine. Its contract value was not disclosed. The reporting places the decision within Microsoft’s broader reassessment of cloud partnerships after commitments exceeding $80 billion to providers including CoreWeave, Nscale, and Nebius, alongside reported concerns about costs, delays, and high-risk projects.

Oracle disputed any broader implication of weak demand for older hardware. A spokesperson said demand remained strong for its AI infrastructure, including earlier-generation GPUs. Oracle had said in September that some four-year-old GPU contracts were being renewed at a 20% premium to their original prices; that statement does not establish the pricing or outcome of Microsoft’s contract.

The reporting also describes Oracle’s financing and market context. Financial_Express said heavy capital expenditure had pushed free cash flow negative and that Oracle shares had fallen more than half from their yearly high. It reported an intraday decline reaching 4.6% following the news, after an earlier gain of approximately 3.5%; these were intraday observations, not closing prices.