Amazon Secures Up to $80 Billion in Supplier Financing for AI

Amazon has set up financing arrangements with its suppliers that allow it to borrow up to $80 billion, secured by the value of the equipment and hardware it purchases. The move is meant to give the company more financial flexibility and an additional funding source for its massive AI infrastructure spending.

According to the company's quarterly filing, the secured facilities will be available from the start of 2027 through the third quarter of 2028, depending on Amazon's needs. Lenders will receive security rights over some of the assets bought under the arrangements.

A different path from rivals

Until now, Amazon has funded data center construction and chip purchases with cash generated by its cloud computing and e-commerce businesses, along with the largest bond issuance in its history. Unlike some competitors, it has largely avoided creative structures such as partnering with investment groups to co-finance data centers or leasing chips bought by other parties. Many of those deals center on Nvidia chips, which power most AI applications and are often among the costliest components of a data center.

Matt Garman, CEO of Amazon Web Services, said in a television interview that the company is looking for ways to fund large investment opportunities responsibly so it can expand as far as possible to serve customers. He added that Amazon is working with partners on mechanisms to balance its cash flows while accelerating expansion.

Spending pressure

The announcement follows third-quarter results in which capital expenditure exceeded analyst expectations. Free cash flow was negative $42.4 billion over the twelve months ended September 30, and Amazon shares fell about 2% by midday Friday in New York.

Total spending commitments rose to $883 billion at the end of September, up 36% from the end of June and more than double the level a year earlier. They include debt and interest, leases not yet commenced, and obligations tied to purchases of property and equipment, reflecting the scale of financial commitments behind Amazon's AI expansion plans.