Microsoft was in advanced talks to lease cloud capacity from Oracle worth over $3 billion, but the deal is said to have collapsed over a security compliance issue. Oracle\u2019s public cloud lacks FedRAMP certification, a requirement for handling U.S. government data. Oracle was unwilling to add the framework, sources told Business Insider.<\/p>\n
Microsoft is \u201cshopping for capacity everywhere,\u201d according to a source familiar with the matter. That search recently led the company to Oracle\u2019s doorstep. Talks centered on moving some Microsoft workloads to Oracle Cloud Infrastructure (OCI), but the negotiations fell apart before any deal was signed.<\/p>\n
The sticking point was FedRAMP, the Federal Risk and Authorization Management Program. This standardized security framework certifies that cloud services are secure enough to handle U.S. government data. Oracle\u2019s public cloud does not carry this certification, and according to one source, Oracle was not willing to add it. An Oracle executive acknowledged separately that adding FedRAMP to the public cloud would be a massive engineering undertaking.<\/p>\n
Capacity crunch drives unusual alliances<\/p>\n
Microsoft projected its capital expenditures for the 2026 calendar year at $190 billion, driven largely by data center expansion. Even so, demand for AI services continues to outpace available infrastructure. Microsoft has already turned to AWS to handle overflow capacity for its GitHub platform<\/a>, following outages tied to the surge in AI-driven software development.<\/p>\n Microsoft is also far from alone in pursuing such deals. Google recently announced it will pay SpaceX $920 million a month for AI compute capacity from October 2026 through June 2029. That deal emerged just two months after Google\u2019s cloud business agreed to sell AI compute to Anthropic. Meanwhile, OpenAI signed a $300 billion deal with Oracle<\/a> for AI infrastructure, a five-year arrangement starting in 2027 that makes Oracle a central player in the AI compute race.<\/p>\n Oracle and Microsoft remain official partners<\/p>\n Oracle disputed the account. \u201cThe details mentioned in the article are inaccurate,\u201d an Oracle spokesperson said. \u201cMicrosoft is both an OCI partner and a customer. We have a tremendously collaborative and fruitful partnership, where we often talk about ways we can expand upon our ongoing work together.\u201d Microsoft declined to comment.<\/p>\n Amazon and Google\u2019s public clouds both carry FedRAMP authorization, giving them a compliance advantage<\/a> for regulated workloads. Microsoft is still evaluating options for leasing capacity from other cloud providers, sources said. The company\u2019s capacity push comes as it faces shareholder scrutiny over its AI infrastructure spending<\/a> and slowing Azure growth.<\/p>\n","protected":false},"excerpt":{"rendered":"Microsoft was in advanced talks to lease cloud capacity from Oracle worth over $3 billion, but the deal…\n","protected":false},"author":2,"featured_media":76732,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[42039,322,420,7829,42040,2304,8550,3282,320,7828,18112,2163],"class_list":["post-76731","post","type-post","status-publish","format-standard","has-post-thumbnail","category-microsoft","tag-ai-capacity","tag-aws","tag-azure","tag-azure-ai","tag-cloud-compliance","tag-cloud-infrastructure","tag-fedramp","tag-github","tag-microsoft","tag-microsoft-ai","tag-oci","tag-oracle"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/posts\/76731","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/comments?post=76731"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/posts\/76731\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/media\/76732"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/media?parent=76731"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/categories?post=76731"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/tags?post=76731"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}