Amazon Explores $8 Billion Nvidia Chip Deal to Optimize Balance Sheet

Amazon is reportedly exploring a deal that would shift approximately $8 billion worth of Nvidia's advanced AI chips off its balance sheet. This arrangement would allow the chips to remain operational within Amazon's data centers without being classified as owned assets.

The proposed structure involves creating a special-purpose vehicle (SPV) that would take ownership of the Nvidia Grace Blackwell AI chips. Amazon would then lease the hardware back, maintaining its operations as usual. These chips are already installed in various data centers across the United States, including locations in Nevada and Virginia.

Funding for the SPV would primarily come from outside investors, likely through debt financing, with potential equity stakes of 10% offered to investors, providing them with additional upside beyond interest payments. Although discussions are ongoing, no final terms have been established, and neither Amazon nor Nvidia has publicly commented on the negotiations.

This move aligns with Amazon's strategy of acquiring over 3 million Nvidia GPUs by 2026, with the aim of easing capital spending pressures and adopting a more flexible, asset-light operational model. The ability to utilize the chips without owning them outright could enhance Amazon's financial agility while continuing to support its extensive AI initiatives.