3M expands Amazon data center partnership, shares gain

Industrial conglomerate 3M has announced an expansion of its commercial partnership with e-commerce giant Amazon, which has resulted in company shares experiencing a surge. On Monday, 3M revealed that it had issued a warrant to an Amazon subsidiary, granting the right to purchase up to 3.16 million 3M shares over the next seven years at a price of $164.89 per share. Following the announcement, 3M's shares were up by over 5% in extended trading.

The agreement between 3M and Amazon comes at a time when major technology companies are ramping up their investments in data-center infrastructure to support the growth of artificial intelligence and cloud computing. The deal is a significant step forward for 3M, as it looks to capitalize on the increasing demand for its products and services in the rapidly evolving tech landscape.

Under the terms of the warrant, approximately 85% of the shares are expected to become available as Amazon purchases optical connectivity and other data-center products from 3M. This portion of the shares will become fully vested once total purchases reach the $6 billion mark. The remaining 15% of the shares will vest once specific milestone-based conditions are met.

3M's partnership with Amazon follows closely on the heels of Microsoft's decision to adopt 3M's Expanded Beam Optics technology in AI data centers, announced in July. This move by Microsoft marks the first time a hyperscaler has integrated 3M's technology into its AI data centers, further solidifying 3M's presence in the rapidly growing tech industry.