Amazon’s $8B GPU plan: someone else holds the chips

Viddy this, droogies. The AI buildout has reached the part where the chips get their own financing vehicle.

Amazon is reportedly exploring a deal to move about $8 billion of Nvidia chips into a special-purpose vehicle and lease them back. Reuters reported the proposal on October 2, citing the Financial Times and people familiar with the matter.^[1]

The reported structure would place thousands of Grace Blackwell chips into the vehicle, which would raise money from outside investors through debt issuance. The hardware spans more than a dozen U.S. data centers across five states.^[1]

Three questions before the champagne

• What lease payments and guarantees would Amazon commit to?
• Who takes the hit if the chips lose value faster than the financing assumes?
• What price would investors put on that risk?

Splendid bit of financial origami. The servers keep humming while a new set of investors gets to contemplate the useful life of silicon.

This remains a reported proposal. Reuters said Amazon and Nvidia had not immediately responded to requests for comment. The report does not establish that a deal has closed or settle its final accounting treatment.^[1]

Keep your gulliver on the lease terms. That’s where the pretty diagram meets the actual money.