Amazon seeks to offload $8B of Nvidia chips

Amazon is seeking to offload about $8 billion of advanced Nvidia chips to external investors, according to a Financial Times report on October 1 citing people familiar with the matter. The company held talks with investors in recent weeks to gauge interest in the transaction.

Under the planned structure, Amazon would spin off thousands of Nvidia Grace Blackwell chips into a special purpose vehicle. The company would then lease the artificial intelligence processors, which are deployed across data centers in the United States, back from the entity. The vehicle would raise funds from outside investors by issuing debt.

The transaction aims to adopt a more asset-light model and strengthen Amazon's balance sheet by transferring costly hardware expenses to third parties. Amazon also plans to offer an equity stake of up to 10% in the vehicle, indicating that the company will not retain any ownership in the entity.

The strategy coincides with efforts by major United States cloud hyperscalers to fund extensive infrastructure expansion without overloading their balance sheets. Amazon stated that it will spend over $200 billion in capital expenditure this year, with a bulk of that capital directed toward Amazon Web Services to build data centers and procure advanced chips.