Oracle Lost a $7 Billion Tencent Deal and a Microsoft Contract in 3 Days: Sell, or Load Up?

Oracle reportedly canceled a $7 billion deal to lease AI computing capacity to Tencent, citing U.S. export restrictions. The agreement involved 100,000 Nvidia AI chips in Southeast Asian data centers. U.S. officials expressed concerns, and Chinese authorities urged Tencent to use domestic chips. Neither company commented. The cancellation highlights risks for U.S. cloud providers serving China.

Anthropic, an AI company, disclosed that Nvidia, Alphabet, AMD, Micron, Broadcom, Microsoft, and TSMC Partners will invest $26 billion in its IPO. Nvidia and Google each commit $10 billion, while others invest smaller amounts. The funds will support Anthropic's $900.9 billion infrastructure spending over 20 years, with $70.7 billion due by September 2027.

Microsoft is opposing a potential Trump administration ban on Chinese optical transceivers, citing risks to AI data center construction. The ban is proposed due to security concerns. Microsoft and other tech firms met with White House officials to discuss supply chain issues. Chinese manufacturers dominate the industry, and U.S. alternatives lack scale. Microsoft's shares rose 2.75% on Monday. The FCC's decision could impact AI infrastructure growth and costs.

IBM and Microsoft have partnered to launch Imagine Enterprise, a platform for large organizations to build and manage AI agents. The platform combines IBM's pre-built AI agents with Microsoft's cloud infrastructure. IBM Consulting will provide industry-specific expertise, while Microsoft supplies the foundational AI and scaling framework. The platform aims to help enterprises move AI pilots into full-scale production with built-in governance and oversight. Financial terms were not disclosed.

Bernstein reiterated its Outperform rating and $325 price target for Oracle (NYSE: ORCL), citing an updated 10-year model that shows improved cash dynamics. The firm expects Oracle to reach positive free cash flow in about 18 months and not require additional external funding. Key catalysts include OpenAI's potential IPO and Oracle's free cash flow inflection.

Seven tech companies, including Alphabet, Nvidia, and Microsoft, reportedly plan to invest $26 billion in Anthropic's IPO. The companies involved are Alphabet, Nvidia, Microsoft, AMD, Broadcom, Micron Technology, and Taiwan Semiconductor Manufacturing. Anthropic has not confirmed the figure, and the reported pricing was deemed inaccurate. The investment would be alongside the IPO offering, with Google having an option to buy up to $10 billion in Class N stock.