Oracle announced the cancellation of a $1.1‑$1.4 billion contract with Super Micro Computer for Nvidia GB300 NVL72 AI server racks. The deal had already seen the shipment of 100‑200 racks before the termination, and the cancellation is widely linked to the indictment of Super Micro co‑founder Wally Liaw for alleged smuggling of AI GPUs to China.
The loss removes a sizable portion of Oracle’s projected revenue from its AI infrastructure and data‑center segment, which has been a key driver of the company’s recent growth. The contract represented roughly 6–8 % of Oracle’s annual revenue, underscoring the material impact of the loss. However, Oracle’s AI infrastructure business is expanding rapidly, with Q3 FY2026 cloud infrastructure revenue up 84 % year‑over‑year, and the company maintains a $553 billion remaining performance obligations backlog, indicating ample future demand to absorb the shortfall.
Super Micro’s loss of the Oracle contract is a significant blow to its revenue and stock price, adding to existing headwinds such as a slowdown in its xAI business and excess inventory of older GPU models. Wiwynn is expected to take over the business that Oracle pulled from Super Micro, signaling a shift in supplier relationships within the AI server market.
Investors have reacted to the cancellation by raising concerns about supplier risk and the reputational implications of dealing with a vendor facing legal scrutiny. Oracle’s management has emphasized its continued confidence in the AI infrastructure strategy, noting that CEO Safra Catz expects total cloud growth to exceed 40 % in FY26 and that co‑CEO Mike Sicilia highlights the company’s full‑stack AI approach as a key differentiator.
The cancellation highlights the importance of robust supply‑chain vetting for high‑value AI hardware. While the loss is material, Oracle’s strong backlog and diversified supplier base suggest the company can maintain its growth trajectory, though the event may prompt a reassessment of risk management practices in future procurement decisions.
The content on EveryTicker is for informational purposes only and should not be construed as financial or investment advice. We are not financial advisors. Consult with a qualified professional before making any investment decisions. Any actions you take based on information from this site are solely at your own risk.