The Pulse
Amazon Discusses $8 Billion Nvidia Chip Financing Structure, FT Reports
Amazon has held talks with investors about transferring roughly $8 billion in Nvidia chips to a special-purpose vehicle and leasing them back, according to a Financial Times report citing unnamed people. The discussions are ongoing and coul
AI.info Team · Written with AI ·
Amazon has held talks with investors about a possible transaction involving about $8 billion worth of Nvidia chips, according to a Financial Times report citing people familiar with the matter. The proposed structure would transfer thousands of Grace Blackwell chips to a special-purpose vehicle and lease the hardware back for use in US data centers. Amazon has not announced the transaction.
The Financial Times reported on October 2 that Amazon had spoken with investors in recent weeks to gauge interest. The discussions are ongoing and could change, the report said. Amazon declined to comment.
Amazon could keep using the chips
Under the proposal described in the report, the special-purpose vehicle would raise money from investors through debt issuance. Amazon would lease the chips after transferring them, using a sale-and-leaseback structure that could free up capital tied to AI hardware.
The chips have been deployed, or are being deployed, across more than a dozen US data centers in five states, including Nevada and Virginia, according to the people cited by the FT. Amazon bought or leased the hardware, the report said. The proposal would change who owns and finances some of the chips, rather than end Amazon’s use of them.
Amazon also plans to offer investors an equity stake of up to 10 percent in the vehicle, according to the report. Investors expect the entity to receive an investment-grade credit rating, drawing on Amazon’s double-A rating. Such a rating could broaden the pool of potential buyers to include insurance companies and pension funds.
A financing move amid $220 billion in spending
The talks come as Amazon expects to spend $220 billion on capital projects this year, with most of that sum directed toward AWS, chips and AI data-center construction, the FT reported. In March, the company set out plans to raise about $50 billion through corporate bond sales, increasing the planned offering from $37 billion after strong demand.
In July, Amazon sold $25 billion in bonds and encountered weaker interest in long-dated debt, with investors seeking higher yields, according to the report. A chip-backed financing structure could offer another way to fund infrastructure investment, although the report did not detail how the proposed transaction would affect Amazon’s balance sheet.
The balance-sheet relief has a trade-off
Moving legal ownership would not remove Amazon’s need to pay for continued access to the hardware: the company would lease the chips back. The structure could shift financing and ownership, but the report does not disclose lease terms, borrowing costs or which investors might participate. Without those details, the proposed $8 billion transaction’s effect on Amazon’s overall financing burden is unclear.
The chips involved are Nvidia’s Grace Blackwell systems, among the company’s most advanced offerings, though the report says they will soon be succeeded by the Vera Rubin generation. Amazon has said in regulatory filings that it expects each semiconductor generation to last at least five years, while older chips remain useful for running applications. The proposal therefore concerns both the cost of acquiring AI capacity and the financing of hardware Amazon expects to keep using.