Tencent Secures 100,000 AI Chips Through $7 Billion Oracle Deal to Bypass US Export Controls

Tencent Secures Largest Overseas Lease Deal with Oracle

Tencent has signed a five-year lease agreement with US cloud provider Oracle to access approximately 100,000 AI chips across multiple Southeast Asia data centers1

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. The Tencent Oracle deal, valued at approximately $7 billion, represents the Chinese tech giant's largest overseas lease agreement to date3

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. Under the terms, Tencent must pay roughly 30% upfront, which contributed to a negative free cash flow of RMB 13.8 billion ($2 billion) in the company's second-quarter earnings—the first negative quarterly figure in over a decade1

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. Oracle shares climbed 1.86% to $139.85 during pre-market trading following the announcement3

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Circumventing US Export Controls Through International Leasing

The arrangement enables Tencent to access advanced processors unavailable in China due to tightening US export controls1

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. While Chinese tech companies are blocked from directly purchasing advanced AI chips, they remain permitted to lease computing capacity internationally under US rules, potentially gaining access to Nvidia's cutting-edge processors4

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. Chinese technology companies have been scrambling to secure AI chip supplies amid escalating restrictions2

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. A shortage of domestic supply has driven Chinese tech groups to seek computing capacity overseas, with demand intensifying as the US tightened export controls to prevent Nvidia's advanced chips from entering China through intermediate locations1

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. This escalation has led to increased prices, longer terms, and higher upfront payments for data center lease agreements across the region.

Accelerating AI Model Development and Infrastructure Investment

Tencent will use the 100,000 AI chips to advance its AI model development and create agentic tools1

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. The company's latest Hunyuan models have demonstrated substantial improvements in performance, closing the gap with top-tier domestic models such as Alibaba's Qwen and offerings from DeepSeek1

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. AI infrastructure spending has surged dramatically, with capital expenditure in the second quarter jumping 176% year-over-year to RMB 53 billion ($7.9 billion) for AI infrastructure and pre-payments for computing resources1

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. Chinese tech giants and frontier AI labs are tapping into these overseas resources especially for training their models, as domestic chips cannot yet perform such computationally intensive tasks1

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Integration Across WeChat Ecosystem and Enterprise Applications

Armed with stronger models, Tencent is implementing AI agents throughout its ecosystem, particularly within WeChat, its superapp that serves more than 1.4 billion users1

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. The company is rolling out Xiaowei, an embedded agent in WeChat designed to execute tasks across the platform's millions of mini-programmes, such as ordering food or booking services, based on natural language commands1

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. Beyond consumer applications, Tencent has built a matrix of AI agents for productivity and enterprise use, led by WorkBuddy, its flagship AI-native office agent, which has experienced rapid user growth and leads the PC-based office agent market in China1

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. The company has also hired top-tier talent and restructured its infrastructure and data departments to support its AI push1

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Competitive Landscape in Southeast Asia Data Centers

While Tencent is catching up with multibillion-dollar leasing deals, ByteDance and Alibaba remain the biggest clients of Southeast Asia data centers1

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. In December 2025, Tencent reportedly gained access to Nvidia's advanced Blackwell AI chips by renting computing capacity at a Datasection-operated data center near Osaka, Japan, allowing the company to use Nvidia B200 processors through a third-party cloud structure despite US restrictions on chip sales to China3

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. Recent reports indicate China has considered allowing companies such as ByteDance and Alibaba to purchase Nvidia's high-end RTX PRO 5500 chips3

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. Beijing has also been promoting domestically developed alternatives to US technology providers2

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. Watch for how sustained heavy spending on AI plans affects Tencent's margins and profitability in coming quarters4

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, and whether other Chinese tech firms follow with similar international leasing arrangements to maintain competitiveness in the escalating AI race.