Microsoft Ends Its Oracle AI Cloud Rental Agreement

Oracle shares fell as low as $109.21, their lowest price in more than a year, before closing up 0.8% at $116.10 on Nov. 6. CNBC’s Seema Mody discussed the report on “Halftime Report.” Microsoft shares traded at $530.61, down 0.99%, while in post-market trading Friday Oracle slipped 0.10% to $115.98 and Microsoft gained 0.13% to $531.30.

Stock Hits Lowest Level Since 2025

The decline extends a difficult stretch for Oracle. The stock closed at $328.33 on Sept. 10, 2025, and finished Friday 64.6% below that peak. It fell 8.8% on Monday, Nov. 2, after Oracle announced plans to raise $20 billion through stock and bonds, then dropped another 6.9% on Thursday, Nov. 5, amid a broader selloff in artificial intelligence stocks. The stock is down 40.7% for the year and 11.2% for the week. The retiree collects $2,700 a month from Social Security and holds another $800,000 in retirement savings, leaving Oracle at 12.7% of a $916,100 portfolio; selling 300 shares would reduce that to 8.9% at a cost of about $3,465 in federal taxes.

Deal Dates to 2023 Bing Partnership

Oracle agreed in 2023 to provide Microsoft with server capacity to power an AI-assisted version of the Bing search engine. Bloomberg reported that Microsoft has been deactivating the rented capacity in recent months after declining to renew the contract, because the older-generation Nvidia chips inside Oracle’s hardware no longer meet its computing requirements. Neither company disclosed the financial value of the agreement.

Microsoft Reconsiders $80 Billion in Outside Cloud Deals

The company recently declined to expand an Nscale deployment in Texas and withdrew from a planned Nscale site in the UK, according to Bloomberg. In 2025, Microsoft and Nscale struck a deal for Nscale to deploy around 200,000 Nvidia AI chips across data centers in Europe and the U.S., but Microsoft later pulled out of anchoring Nscale’s flagship project in Loughton, Essex, after power connection delays pushed the expected supply date into the 2030s. Separate negotiations to lease additional Oracle capacity broke down in June, Business Insider reported.

Oracle Cites Strong Demand for Earlier Chips

In its most recent quarter, Oracle reported revenue up 30% to $19.3 billion, with cloud infrastructure revenue rising 121%. The retiree’s 1,000 shares, bought for $39,090 in 2016, were worth $116,100 at Friday’s close, down from $328,330 at the September 2025 peak. Bloomberg reported that Oracle’s free cash flow has turned negative due to data center construction spending, leaving its credit rating one level above junk status, while research firm Gartner warned that aggressive AI infrastructure investment risks significant write-downs as faster, more efficient chips enter the market.