Amazon Shifts $8 Billion in Nvidia Chips Off Balance Sheet

Amazon is restructuring its ownership of AI hardware in data centers by moving $8 billion worth of Nvidia chips into a special purpose vehicle. This deal, reported by the Financial Times, would involve selling debt to outside investors and leasing back the chips to Amazon.

The company's long-term debt rose to $119.1 billion from $65.6 billion a year earlier, while free cash flow turned negative at -$7.6 billion over the past 12 months. By using this leaseback model, Amazon can keep running its AI hardware while protecting its credit rating and moving the obligation into lease disclosures.

Nvidia is also building similar financing structures, with $279 billion in supply commitments and guarantee obligations limited at $108.5 billion for AI cloud and data center partners. The company expects to raise more than $500 billion of outside capital for AI infrastructure through partnerships with asset managers and banks.