Amazon Plans to Lease Nvidia Chips Worth $8 Billion to Optimize Debt

The American technology giant Amazon is considering leasing advanced Nvidia chips worth approximately $8 billion to external investors through a specially created structure to strengthen its financial balance.

This was reported by Dilo, citing data from the Financial Times.

The Seattle-based cloud giant has been negotiating with investors in recent weeks to gauge their interest in the deal. The scheme involves transferring thousands of Grace Blackwell chips, which the corporation is already deploying in data centers across the United States, to a special purpose vehicle (SPV).

After that, Amazon will lease these processors back from the SPV, which will raise funds from external investors through the issuance of debt securities. Transferring expensive semiconductors to investors will allow the company to move to a less asset-heavy financial reporting model. Amazon declined to comment.

How Tech Giants Optimize Debt

This move is driven by the search for ways to finance the massive costs of data center infrastructure, a significant portion of which is the procurement of chips for training advanced artificial intelligence models.

Tech giants are trying to move debt off their balance sheets to maintain their creditworthiness. They use residual value guarantees, assuring creditors of the future value of chips or data centers without directly incurring debt, which obscures the actual volume of risks taken.

Investors expect that the newly created company will receive an investment credit rating due to Amazon's current rating of "AA." This will pave the way for attracting funds from a broader range of investors, particularly pension and insurance funds. Amazon plans for the equity of the structure to be only up to 10%, while the corporation itself will not own any stake in it. Negotiations are ongoing, and terms may change.

AI Expenses and Chip Inventory

The chips involved in the planned agreement were purchased or leased by Amazon and are already deployed in more than ten American data centers across five states, including Nevada and Virginia. Although the Grace Blackwell line remains one of the newest from the manufacturer, it is soon to be replaced by the next-generation Vera Rubin platform.

Advanced chips are used by leading AI laboratories, including OpenAI and Anthropic (in which Amazon has committed to invest up to $83 billion), while previous generations of chips continue to be used to support applications. According to the company's reporting, Amazon expects the lifespan of each series of semiconductors to be at least five years.

Amazon's capital expenditures are expected to reach $220 billion this year, most of which will go to its cloud division AWS for chip procurement and data center construction. In March, the company planned to raise about $50 billion through bond issuance, increasing the offering from $37 billion due to high demand. However, in July, during the placement of $25 billion in debt, it faced a decline in demand for long-term securities as investors demanded higher yields.

At the same time, GPU-backed financing is gaining popularity among companies like CoreWeave. To reduce borrowing costs for its clients, Nvidia offered to secure up to $125 billion in such obligations through a $500 billion financial platform in collaboration with leading Wall Street groups in August.

It is worth noting that it was previously reported that Amazon will invest $3 billion in the development of fast delivery in India. The American e-commerce giant Amazon plans to invest $3 billion by 2030 to develop its ultra-fast delivery business in India, trying to catch up with local competitors who have made mass orders in a matter of minutes.

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