Amazon.com Inc. reportedly plans to offload some of its artificial intelligence chips and then lease them back.
The Financial Times today cited sources as saying that the transaction would involve a special purpose vehicle, or SPV. A SPV is a type of legal entity that enterprises set up to optimize the administrative aspects of large deals. Such vehicles often take the form of a standalone company without any employees.
Amazon’s plan would see it transfer about $8 billion worth of chips to the SPV. From there, the SPV will issue debt and a 10% equity stake to external investors. Amazon has reportedly been holding talks with potential backers for several weeks.
The chips at the center of the deal are reportedly Grace Blackwell accelerators. Each such device includes two of Nvidia Corp.’s Blackwell graphics processing unit and one Grace central processing unit. A custom interconnect, NVLink-C2C, links together the GPUs and CPU to facilitate data movement.
Blackwell was Nvidia’s flagship AI accelerator until last March. That month, it introduced an enhanced version called Blackwell Ultra that includes more memory. Nvidia’s current flagship GPU, the Rubin, is several times faster than both chips.
In August, Amazon agreed to buy 2 million additional GPUs from the chipmaker through 2028. The deal encompasses Blackwell Ultra, Rubin and an upcoming accelerator called Rubin Ultra that is set to launch next year.
Modal Inc., a venture-backed AI infrastructure provider, estimates that a Grace Blackwell accelerator costs between $60,000 to $70,000. Given the expected $8 billion price tag of Amazon’s SPV deal, that suggests the company intends to offload between 114,000 and 133,000 chips.
The accelerators are said to be installed in five Amazon data centers. Some of the accelerators are owned by the company, while others are leased. Amazon reportedly plans to continue using the chips after offloading them by signing a lease agreement.
Moving the chips to an SPV would remove them from Amazon’s balance sheet. Perhaps more importantly, it would also remove the debt that the SPV reportedly plans to raise.
Moving debt off a company’s balance sheet improves its debt-to-equity ratio, a metric that factors into its credit rating. A company’s credit rating, in turn, influences its ability to borrow funds and the cost of doing so.
The Wall Street Journal recently reported that Amazon, Google LLC and seven other tech giants together have $3 trillion in off-balance-sheet obligations. Much of that debt is tied to AI infrastructure projects. Meta Platforms Inc., for example, has sold a 80% stake in its flagship Hyperion data center campus to an investment firm.
Tech giants are also optimizing the financial structure of their AI deals in other ways. On Wednesday, the New York Times reported that Meta has claimed billions of dollars in innovation tax credits by characterizing its AI data centers as experimental projects.