Microsoft is winding down an arrangement to rent AI computing from Oracle, part of a larger reassessment of billions of dollars in cloud partnerships, Bloomberg reported on Friday. In recent months, Microsoft has been turning off rented computing capacity from Oracle after declining to renew the contract, according to people familiar with the matter, Bloomberg said.
Oracle reported $664.0 billion of remaining performance obligations, its contracted future revenue, at 31 August 2026 in its latest 10-Q, up 45.8% from $455.3 billion a year earlier, by our arithmetic. The readable part of Bloomberg’s report gives no size, megawatt figure or end date for the Microsoft arrangement.
A Business Pill Short that uses this story as its worked example. Facts: Microsoft and Oracle as reported by Bloomberg (in this piece); six-year lives from our Nvidia guarantees piece.
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The key insight: As we read Bloomberg’s report, Microsoft is shrinking one rented-capacity relationship while Oracle’s filings show $664.0 billion of contracted future revenue at the end of August; the readable report gives no size for the Microsoft arrangement, so its weight inside that backlog is not established.
Bloomberg’s report, by Brody Ford, was published at 12:36 p.m. New York time and marked exclusive. We read its opening only; the rest was behind a paywall.
FinancialJuice, summarising the report on X at 17:39 UTC, wrote that the capacity “had become less useful as it relied on older-generation Nvidia chips that no longer matched Microsoft’s specifications”. It also wrote that Oracle “maintains that demand for its AI infrastructure remains strong, including for older GPUs”. We did not see those passages in Bloomberg’s readable text, so they are FinancialJuice’s account.
Oracle remaining performance obligations at each quarter end from August 2025 to August 2026, from its 10-Q and 10-K filings. Bloomberg reported on 6 November 2026 that Microsoft is winding down an arrangement to rent AI computing from Oracle.
What Was Posted on X
$MSFT WINDS DOWN AI CLOUD DEAL WITH $ORCL
Microsoft has reportedly declined to renew its 2023 agreement to rent AI computing capacity from Oracle and has been gradually shutting down that capacity in recent months, Bloomberg reports.
The deal was originally intended to power an AI-enhanced version of Bing.
However, the Oracle servers used older-generation Nvidia GPUs that no longer met Microsoft’s computing specifications.
Oracle says demand for its AI infrastructure remains strong, including for older-generation GPUs.
Wall St Engine posted this summary of Bloomberg’s report at 17:54 UTC on 6 November. It says Microsoft declined to renew its 2023 agreement to rent AI computing capacity from Oracle, that the deal was originally for an AI-enhanced Bing, and that the Oracle servers used older-generation Nvidia GPUs. The piece’s update box quotes it.
How Oracle Shares Moved
Oracle traded at $112.40 at 12:55 p.m. New York time, down 2.40% from Thursday’s close of $115.16, according to Nasdaq’s real-time quote. That is an intraday price, not a close. investingLive wrote that the stock had reached a session high of $119.70 on Friday; $112.40 is 6.1% below that high, by our arithmetic.
The shares closed at $139.56 on 29 October and $115.16 on 5 November, a 17.5% fall over five sessions, by our arithmetic from Nasdaq’s historical closes.
Oracle’s Backlog, Quarter by Quarter
Oracle’s filings put remaining performance obligations at $455.3 billion at 31 August 2025, $523.3 billion at 30 November 2025, $552.6 billion at 28 February 2026, $638.0 billion at 31 May 2026 and $664.0 billion at 31 August 2026. The last step was a 4.1% rise in one quarter, by our arithmetic. The filings do not break out how much of that total is owed by Microsoft.
Update, 6 Nov, 18:05 UTC: more detail via Wall St Engine.Wall St Engine, summarising Bloomberg’s report on X at 17:54 UTC, wrote that Microsoft has reportedly declined to renew its 2023 agreement to rent AI computing capacity from Oracle and has been gradually shutting down that capacity in recent months. It wrote that the deal was originally intended to power an AI-enhanced version of Bing, and that the Oracle servers used older-generation Nvidia GPUs that no longer met Microsoft’s computing specifications. It added that Oracle says demand for its AI infrastructure remains strong, including for older-generation GPUs. We did not see these details in Bloomberg’s readable text; they are Wall St Engine’s account of the report.
Update, 6 Nov, 19:10 UTC: The Information reports the same reason; Reuters adds no comment from either company. The Information published its own briefing at 11:00 a.m. Pacific time on November 6, headlined “Microsoft Ends Deal to Rent Cloud Servers from Oracle.” Its summary says “Microsoft declined to renew its contract because the servers it was renting from Oracle were equipped with older chips that Microsoft believed became less useful over time.” That matches the older-chip reason in the Bloomberg-based accounts above; we read only The Information’s summary, not the full briefing.
Reuters, in a write-up of Bloomberg’s report, said the capacity “became less valuable as it no longer met the company’s evolving needs,” that Oracle shares were down nearly 3% in afternoon trading while Microsoft was little changed, and that “Microsoft and Oracle did not immediately respond to Reuters’ requests for comment.”
Neither account we could read gives the size of the contract, the number of servers or an end date.
As we read the coverage, this is the third Microsoft supplier move Bloomberg has reported this week, after tighter oversight of three neoclouds and a declined expansion option at Nscale.
As we read Oracle’s filings, the backlog rose 45.8% in a year and 4.1% in the latest quarter, by our arithmetic, and the filings do not name how much Microsoft owes.
As we read the price data, Oracle traded 2.40% lower at 12:55 p.m. New York time on Friday after falling 17.5% over the five sessions to Thursday’s close, by our arithmetic from Nasdaq.
Bloomberg, 6 November 2026, citing people familiar with the matter
“In recent months, Microsoft has been turning off rented computing capacity from Oracle after declining to renew the contract”
Three Implications
FOR ORACLE Its 10-Q puts remaining performance obligations at $664.0 billion at 31 August 2026; the customer split is not disclosed.
FOR MICROSOFT’S SUPPLIERS Bloomberg reported a larger reassessment of billions of dollars in cloud partnerships, which this week also touched Nebius, IREN and Nscale, as we reported.
FOR READERS We read Bloomberg’s opening only; the arrangement’s size, start and end dates are not established in what we read.
The framework says: “cloud providers now hold roughly $2.1 trillion in revenue backlog, and half of that — $1.05 trillion — comes from two cash-burning AI startups, OpenAI and Anthropic.”
As we read it, Oracle’s $664.0 billion is one of those backlogs, and today’s report concerns the other side of Oracle’s book: a hyperscaler renting capacity from it. The framework predates the report and does not discuss it.
What Is Not Established
The size of the Oracle arrangement, when it began, when it ends and how much capacity has been turned off are not given in the parts of Bloomberg’s report we read. We did not see a statement from Microsoft or Oracle. The chip-generation reason is FinancialJuice’s summary, not text we read from Bloomberg.
This Week In The AI Supercycle
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Bloomberg reported that Microsoft is winding down a contract to rent AI computing from Oracle and has been switching off that capacity after declining to renew it, as part of a wider review of its cloud partnerships. Oracle’s contracted backlog stood at $664.0 billion at the end of August, and its shares traded 2.40% lower at midday on Friday.
A note on sourcing. The Microsoft–Oracle report is Bloomberg’s, citing people familiar; we read its opening only. The chip-generation reason and Oracle’s demand comment are FinancialJuice’s summary. Oracle’s backlog figures are from its SEC filings and the share prices from Nasdaq; the percentages are our arithmetic. We did not contact Microsoft or Oracle.
Gennaro Cuofano is a CRO and tech executive who has worked in AI since late 2015, starting with bringing NLP, natural-language generation, voice and chatbot products to the marketing industry. His background is in law and finance: he holds a Master's degree in Law and an International MBA with an emphasis on corporate finance (LUISS Business School and the University of San Diego, 2012), and worked as a financial analyst at a real-estate investment firm in San Diego and as an assistant controller. His work focuses on business model strategy, business engineering and, more broadly, structural analysis: how companies make money, read from their own filings. He created FourWeekMBA and leads research there and at The Business Engineer, his newsletter on AI and business strategy, with over 95,000 subscribers and more than 1,000 published analyses. His writing has also appeared on Entrepreneur (for example, How to Digitize a Family Business in Europe) and HackerNoon. Find him on LinkedIn and Substack. See how we source.
