Microsoft and Oracle Discussed Sharing AI Servers to Solve Shortage

Oracle and Microsoft recently discussed an unusual agreement to rent servers from each other if either company runs out of computing power for cloud customers that use large-scale artificial intelligence, according to a person with direct knowledge of the negotiations. A deal would help the two rival cloud providers meet surging demand for servers that can run AI software, which has caused a shortage.

The proposed deal discussions have been happening as Oracle Chairman Larry Ellison and other senior executives firm up a broader AI strategy, including how to use AI software—possibly from ChatGPT creator OpenAI—to improve the company’s core software products, the person said. Oracle is also considering developing AI software in-house that it would sell to cloud customers.