Amazon Reportedly Plans $8 Billion AI Chip Sale-Leaseback Through SPV

The Financial Times cited sources as saying the deal would involve a special purpose vehicle, or SPV, a legal entity that companies set up to streamline large transactions and that often takes the form of a standalone company without employees. Under the reported plan, Amazon would move the chips to the SPV, which would issue debt and a 10% equity stake to external investors. Amazon has reportedly held talks with potential backers for several weeks.

The chips at the center of the transaction are Grace Blackwell accelerators, according to the report. Each device includes two of Nvidia Corp.'s Blackwell graphics processing units and one Grace central processing unit, linked by a custom interconnect called NVLink-C2C to facilitate data movement.

Blackwell was Nvidia's flagship AI accelerator until last March, when the company introduced an enhanced version called Blackwell Ultra with more memory. Nvidia's current flagship GPU, the Rubin, is several times faster than both chips.

In August, Amazon agreed to buy 2 million additional GPUs from the chipmaker through 2028. That deal covers Blackwell Ultra, Rubin and an upcoming accelerator called Rubin Ultra, which is set to launch next year.

Modal Inc., a venture-backed AI infrastructure provider, estimates that a Grace Blackwell accelerator costs between $60,000 and $70,000. Given the expected $8 billion price tag of Amazon's SPV deal, that suggests the company intends to offload between 114,000 and 133,000 chips.

The accelerators are said to be installed in five Amazon data centers. Some are owned by the company, while others are leased. Amazon reportedly plans to continue using the chips after offloading them by signing a lease agreement.

Moving the chips to an SPV would remove them from Amazon's balance sheet. The structure would also remove the debt that the SPV reportedly plans to raise. Moving debt off a company's balance sheet improves its debt-to-equity ratio, a metric that factors into its credit rating. A company's credit rating influences its ability to borrow funds and the cost of doing so.

The Wall Street Journal recently reported that Amazon, Google LLC and seven other tech giants together have $3 trillion in off-balance-sheet obligations. Much of that debt is tied to AI infrastructure projects. Meta Platforms Inc., for example, has sold an 80% stake in its flagship Hyperion data center campus to an investment firm. Tech giants are also optimizing the financial structure of their AI deals in other ways. On Wednesday, the New York Times reported that Meta has claimed billions of dollars in innovation tax credits by characterizing its AI data centers as experimental projects.

Editor's Summary Amazon reportedly plans to move about $8 billion in Grace Blackwell AI chips into a special purpose vehicle and lease them back, according to the Financial Times. The SPV would issue debt and a 10% equity stake to outside investors, removing the chips and the associated debt from Amazon's balance sheet. The report comes as large technology companies use off-balance-sheet financing for AI infrastructure, with the Wall Street Journal putting combined off-balance-sheet obligations at $3 trillion for Amazon, Google and seven other tech giants.