Amazon Plans to Remove $8 Billion in Nvidia Chips from Its Balance Sheet Through a Separate Entity — FT

Amazon is considering a deal that would allow it to remove approximately $8 billion worth of Nvidia chips from its balance sheet, the Financial Times reports, citing sources familiar with the discussions. The deal involves thousands of state-of-the-art Grace Blackwell chips installed in more than ten of the company’s data centers in the United States.

The chips are set to be transferred to a special-purpose vehicle (SPV) that will be financed by outside investors, according to sources who spoke to the FT. This arrangement will allow Amazon to continue using the equipment while transitioning to a less capital-intensive financing model, as the chips will no longer appear on its balance sheet. According to FT sources, this entity will be able to raise debt financing and sell up to a 10% stake to investors.

Representatives from Amazon and its cloud division, Amazon Web Services, did not respond to requests for comment from the FT and Bloomberg.

"Funding for AI infrastructure is expanding beyond the surge in capital expenditures: total spending by hyperscalers could approach $9 trillion by the end of 2031, while debt issuance could reach $500 billion in 2027. Amazon’s debt is rising, and Nvidia’s record share buyback shows that AI spending can coexist with shareholder payouts,” said Robert Schiffman, a credit analyst at Bloomberg Intelligence.

Such deals reflect the growing complexity of the financing structures being used to fuel the investment boom in AI infrastructure, as the largest technology companies spend hundreds of billions of dollars on equipment and data centers, according to Bloomberg.

In September, Qualcomm entered into an agreement with Amazon to supply AI chips worth up to $60 billion over the next decade, granting Amazon warrants to purchase its shares worth up to $4 billion. Both Nvidia and its competitor AMD have previously employed similar practices—investing in customers or granting them equity stakes as part of equipment supply deals. Critics have pointed out that such schemes can resemble circular financing and create artificial demand.

At the same time, Amazon is developing its own line of Trainium AI chips in an effort to reduce its dependence on Nvidia: in April, the company reported that customer contract commitments for Trainium exceeded $225 billion, and this summer it began discussing the supply of these chips to third-party companies. Amazon CEO Andy Jassy previously stated that the company is considering selling Trainium to external customers, similar to what independent processor manufacturers do.

This article was AI-translated and verified by a human editor