Oracle Denies Report That Security Concerns Killed Potential $3 Billion Microsoft Cloud Deal - Amazon.com

Negotiations between Microsoft Corp. (NASDAQ:MSFT) and Oracle Corp. (NYSE:ORCL) regarding the leasing of Oracle’s cloud infrastructure reportedly came to a halt due to security and compliance issues.

The objective was to transfer some of Microsoft’s workloads to Oracle’s Cloud Infrastructure. However, Oracle’s public cloud did not meet the Federal Risk and Authorization Management Program (FedRAMP) standards, a security framework essential for handling U.S. government data. Oracle was not ready to implement this framework, reported Business Insider.

The deal, which could have been worth over $3 billion, was called off due to these security concerns. An Oracle executive stated that integrating FedRAMP into Oracle’s public cloud would necessitate significant engineering efforts.

According to the report, public clouds from Amazon.com Inc. (NASDAQ:AMZN) and Alphabet Inc.‘s (NASDAQ:GOOGL) (NASDAQ:GOOG) Google already comply with FedRAMP.

However, an Oracle spokesperson disputed the report and told Business Insider that Microsoft remains both a partner and customer of Oracle Cloud Infrastructure (OCI), and that the two companies continue to maintain a strong, collaborative relationship while regularly exploring opportunities to expand their existing work together.

The company did not immediately respond to Benzinga‘s request for comment.

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AI Boom Drives Cloud Partnerships

Microsoft is pursuing agreements with other cloud providers to prioritize Azure resources for customers as it looks to secure additional computing capacity, according to the report.

The company expects to spend $190 billion in 2026 to expand data center capacity and has already relied on Amazon’s infrastructure to support GitHub and mitigate recent outages.

OpenAI’s acquisition of Ona last week to power Codex with secure, customer-controlled cloud infrastructure demonstrates the growing importance of secure cloud infrastructure. Ona, which supports over 2 million developers, shares customers with OpenAI and has helped transition software development workflows into cloud-based environments.

As for Oracle and Microsoft, in 2025, Oracle announced a collaboration with the software giant to create an integration blueprint to enhance supply chain efficiency and responsiveness for manufacturers. The partnership was aimed at leveraging Oracle Fusion Cloud Applications, adopted by organizations like the U.S. Air Force and the Choctaw Nation.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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