Sources: Amazon has held talks with investors about a deal to spin off $8B of Grace Blackwell chips into an SPV, then lease them back for its US data centers

Amazon's cloud unit can deploy chips without owning them, potentially reducing capital expenditure requirements.

Amazon.com Inc. is reportedly in discussions with investors about a potential deal to spin off approximately $8 billion worth of high-end Nvidia chips. These chips are currently used in Amazon's U.S. data centers. The proposed transaction would involve moving these assets into a special purpose vehicle (SPV). Following the spin-off, Amazon would then lease these chips back for its ongoing operations. The Financial Times reported these discussions, highlighting the significant value of the chips involved in the potential transaction.

This move by Amazon signals a growing trend among hyperscalers to leverage financial engineering for managing expensive, essential hardware like AI accelerators. By spinning off chips into an SPV and leasing them back, Amazon could free up significant capital and reduce the on-balance-sheet impact of its substantial chip investments. This approach offers greater financial flexibility, allowing the company to scale its AI infrastructure more dynamically without the immediate need for massive upfront purchases or the risk associated with owning rapidly depreciating, cutting-edge technology.

The strategy could also enable Amazon to gain access to newer chip generations more quickly, as lease agreements might be more adaptable than long-term ownership and depreciation cycles. Competitors may follow suit if this proves successful, potentially altering how cloud providers finance and manage their AI hardware fleets, and impacting the broader market for specialized computing hardware. It could also change how investors view the capital intensity of AI infrastructure.