Amazon.com (AMZN.US) has set up a supplier financing arrangement that allows it to borrow up to $80 billion backed by the value of hardware it purchases. This is the company's latest move to maintain financial flexibility as it pours hundreds of billions of dollars into artificial intelligence infrastructure.
So far, Amazon has funded data center construction and chip procurement using cash from its cloud computing and retail businesses, as well as the largest corporate bond issuance in the company's history. However, the company has largely avoided the kind of innovative financing arrangements used by some competitors, such as jointly financing data center construction with investment groups or leasing chips purchased by other entities. Many of these deals revolve around Nvidia (NVDA.US) chips, which power most AI computing and are often the single most expensive component in newly built data centers.
Amazon disclosed in a quarterly filing released Thursday after its earnings report that the secured loan facility can be drawn at the company's discretion, with a drawdown period from early 2027 through the third quarter of 2028. Lenders will receive collateral interests in certain purchased assets related to the financing arrangement. Amazon's filing did not specify what those assets include, and a spokesperson declined to comment.
"When we see such a massive opportunity in front of us, we also look for ways to finance it responsibly so that we can scale as large as possible for our customers," said Matt Garman, CEO of Amazon Web Services (AWS), in an interview on Friday. He said Amazon is working with partners to "figure out how to balance some of that cash flow while significantly accelerating expansion."
On Thursday, Amazon reported third-quarter earnings showing capital expenditure growth was higher than expected. This spending led to a net free cash flow outflow of $42.4 billion in the year ended September 30. Amazon's total spending commitments, including debt and interest, leases not yet commenced, obligations to acquire property and equipment, and other items, swelled to $883 billion at the end of September, up 36% from three months earlier and more than double the level of the same period in 2025.
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