Amazon seeks to offload $8 bln of Nvidia chips to investors- FT

Amazon is planning to sell approximately $8 billion worth of Nvidia chips to outside investors, the Financial Times has revealed. According to sources close to the situation, Amazon has been engaging in discussions with potential investors over the past few weeks to assess their interest in such a deal. The company intends to set up a special purpose vehicle that will hold thousands of Grace Blackwell chips, which are currently being utilized in numerous data centers across the United States.

The advanced AI chips will subsequently be leased back to Amazon through the vehicle, which would then raise funds by issuing debt to investors. This strategic move aims to improve Amazon's financial position by offloading the costly chip expenses to external parties and adopting a more asset-light approach. The shift in financing strategy aligns with a larger trend among U.S. tech giants, known as hyperscalers, who are looking for less balance sheet-intensive ways to fund their expansive data center expansion plans.

The majority of data center expenditures are tied to the advanced chips employed in training artificial intelligence models. Amazon has also announced its intention to offer an equity stake of up to 10% in the special purpose vehicle, emphasizing that the company will not retain any ownership in the entity. The e-commerce giant has outlined a capital expenditure budget of over $200 billion for the current year, with a significant portion allocated to its Web Services cloud division for acquiring more chips and constructing additional data centers.