Amazon Considers Chip Financing Structure Amid AI Spending Focus

Amazon's recent move to consider financing $8 billion of Nvidia's Grace Blackwell chips through a special-purpose vehicle (SPV) has investors focused on the company's AI spending.

The proposed structure would see Amazon lease back the chips, with the SPV seeking debt financing while Amazon could offer up to 10% equity in the vehicle.

While this financing structure provides flexibility for infrastructure funding, it doesn't eliminate economic obligations, and the terms of the lease agreements, guarantees, and residual value assumptions will impact Amazon's return on investment.

AWS revenue increased 37% year-over-year to $42.2 billion in Q2, with operating income rising 43% to $27.5 billion.