Microsoft abandoned a potential deal worth over $3 billion to lease cloud infrastructure from Oracle.
Negotiations collapsed because Oracle’s public cloud lacks the Federal Risk and Authorization Management Program (FedRAMP) certification. This security standard is a mandatory requirement for handling U.S. government data.
Sources indicate Oracle was unwilling to undertake the engineering effort required to achieve FedRAMP compliance. Microsoft is currently seeking to expand its computing capacity to meet surging demand for AI services.
Oracle stated that the reports are inaccurate. The company emphasized that its collaborative partnership with Microsoft continues.