Amazon reportedly considering sale-leaseback of $8 billion Nvidia AI chips

Amazon is reportedly considering a significant financial maneuver involving approximately $8 billion worth of Nvidia Grace Blackwell AI chips. The plan involves spinning off these chips into a special purpose entity (SPV) and then leasing them back, according to reports citing sources familiar with the matter.

The proposed transaction would see the chips, distributed across more than ten data centers in five U.S. states, transferred to the SPV. This newly formed entity is expected to secure an investment-grade credit rating and subsequently raise external capital through share sales and bond issuances.

This strategic approach is designed to help Amazon manage the substantial debt obligations associated with its large-scale investments in artificial intelligence infrastructure. By facilitating a lighter asset model, the company could gain greater financial flexibility.

The sale-and-leaseback structure allows Amazon to continue utilizing critical AI hardware while potentially reducing its on-balance-sheet debt. This financial engineering could free up capital for other strategic initiatives or operational needs.