Microsoft cuts back neocloud partners and ends its Oracle AI server rental

Microsoft is reducing its roster of neocloud partners and concentrating on a few key suppliers and its own data centers, according to two people familiar with the matter.

The company has not decided which neoclouds it will stop using, CNBC reports. Neocloud shares have fallen by roughly half over the past month amid rising borrowing costs and debt concerns.

Bloomberg reports that Microsoft declined to renew a 2023 contract built around Bing and is switching off the AI servers it rented from Oracle. According to people familiar with the matter, the capacity lost value because Oracle's older Nvidia chips no longer matched Microsoft's specifications. Oracle says demand for its AI infrastructure remains strong and renewed contracts for 4-year-old GPUs at a 20% premium in September.