Report: Older Nvidia Chips Cost Oracle Its Microsoft Deal

By James Calloway

Oracle shares hit a 52-week low of $109.21 on November 6, 2026, according to 24/7 Wall St. People familiar with the matter told the publication that Microsoft was winding down its contract to rent AI computing capacity from Oracle.

The deal was announced in 2023 and gave Microsoft server access to run the then-new AI version of Bing. The contract's value never became public, and its full size was never determined.

That combination leaves the central claim unverified. Microsoft declined to comment, and the report did not specify which Nvidia chip generation powered the hardware. No document supports the reported cause on the record.

What exactly did Microsoft end?

People familiar with the matter told 24/7 Wall St. that Microsoft declined to renew the contract. They also said Microsoft spent recent months switching the capacity off.

The same sources said Oracle's hardware ran on older Nvidia chips that no longer met Microsoft's specifications. 24/7 Wall St. did not identify the chip generation, and Microsoft gave no reason of its own for letting the agreement run out.

The report also discloses no termination date. "Winding down" describes a non-renewal, not a cancellation of the remaining term.

In 2023, 24/7 Wall St. characterized Microsoft's decision to rent computing power from a rival as an early sign of an AI chip shortage. The wind-down now suggests that constraint has eased, though Microsoft has not said so.

Microsoft ended a small capacity arrangement without publicly explaining why.

How much does the contract matter to Oracle?

Microsoft's $3.94 trillion market value puts the rental in perspective. 24/7 Wall St. called the arrangement a small line item for a company of that size, dating to the early Bing chatbot days.

Microsoft shares fell 0.99% to $530.61, with no cause reported. Oracle's cloud business brought in $18 billion in revenue for the year ended May 2026, according to 24/7 Wall St.

Most of that growth came from OpenAI and other large AI contracts. The report described those deals as far larger than the Bing arrangement. It did not break out how much revenue the Microsoft contract contributed.

Oracle depends less on one small contract than the initial stock reaction suggested.

Can Oracle rent the same chips to someone else?

An Oracle spokesperson said demand for the company's AI infrastructure remains strong. That demand includes earlier-generation GPUs, or graphics processing units, according to the spokesperson.

Oracle said in September that GPUs coming up for renewal were renewed or rented to new customers at a 20% premium. The company added: "The majority of those GPUs are 4 years or older."

GPU utilization, the share of the fleet in use, reached 97.9% that quarter, 24/7 Wall St. reported. If Oracle can rerent Microsoft's retired capacity at similar prices, losing the contract costs it very little.

The two accounts conflict. A top customer reportedly decided Oracle's chips were too old for its needs, while Oracle says even its oldest GPUs get rented again at higher prices.

Oracle's 97.9% figure covers its entire fleet. The report offers no utilization number for the specific Microsoft hardware, and it does not state that hardware's exact age. The September disclosure is a company-wide statement, not an update on the rejected machines.

Oracle's defense rests on reusing hardware that a major buyer rejected.

Who holds pricing power now?

Microsoft spent $45.2 billion on capital expenditures in its September quarter, according to 24/7 Wall St. Capital expenditure, or capex, covers money spent to acquire and build long-lived assets.

Nvidia GB300 systems now make up most of Microsoft's GPU fleet. The company has also committed more than $80 billion to renting capacity from other cloud providers, including CoreWeave and Nebius.

Microsoft plans to cut that supplier list to a few key suppliers. The company has cited costs and delays as the reasons, according to 24/7 Wall St.

CoreWeave said Microsoft supplied 62% of its 2024 revenue. Even so, CoreWeave rose 6.14% and Nebius gained 7.58% on November 6.

24/7 Wall St. argued that the shortage behind the Bing deal has eased. For the largest buyer, that gives Microsoft more say over price than the companies renting out computing power.

The report did not explicitly link Microsoft's GB300 fleet to its rejection of Oracle's hardware. The stated reason for the exit remains an unnamed-source account, and Microsoft has not confirmed it.

24/7 Wall St. also published a free report on the AI infrastructure boom that profiles seven suppliers. A less constrained Microsoft can negotiate harder with the clouds it depends on.

What was already priced into Oracle's stock?

Oracle shares fell 6.93% on November 5. That day, the Philadelphia Semiconductor Index dropped 12%, its steepest fall since March 2020. Oracle's decline was smaller than the sector's.

The stock has lost more than half its value since its June 1 high of $248.15. The $109.21 low sat about 5.2% below the November 5 close of $115.16.

Oracle recovered to close at $116.01, up 0.74%. That closing price gave the company a market value of $361.69 billion.

24/7 Wall St. read buyers stepping in near the low as evidence that the market expected bad news. The counterweight is Oracle's free cash flow, or cash remaining after operating spending and capital investment, which stood at negative $5.396 billion last quarter.

The report said every renewal Oracle loses now hurts more than it once did. Investors appeared to treat the Microsoft exit as part of a larger decline rather than a separate shock.

The recovery from the low suggests much of the bad news was already discounted, though cash flow leaves Oracle less able to absorb lost contracts.

What could change the outlook?\n

Oracle expects at least $90 billion in fiscal 2027 revenue and non-GAAP EPS, or company-adjusted earnings per share, of $8.10. 24/7 Wall St. argued that the current price likely reflects much of the downside.

Microsoft carries less cash flow risk than Oracle, according to the report. Azure grew 48% last quarter, and the company produced $18.6 billion of free cash flow.

The first checks arrive with CoreWeave's report on November 10 and Nvidia's on November 17. The real test comes with Oracle's next report, expected around December 9, although the company has not confirmed the date.

24/7 Wall St. said falling GPU usage, a vanishing renewal premium, or a close below $109.21 would undercut its view. Because the contract's revenue was never disclosed, the direct financial loss remains unquantified.

The December report will show whether Oracle can sustain 97.9% GPU utilization and the 20% renewal premium after losing a customer that rejected its chips.