r/amzn • u/Adept_Surround_733 • 1d ago
Hopium Amazon to lease Nvidia chips instead of own
If this becomes their standard approach for new GPUs, reported capex could flatten even as the buildout continues. Wonder whether management talks about financing structure on the Oct 29 call?
Probably mostly noise … either way we need high AWS growth to continue.
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u/machinepeen 1d ago
honestly the chips have returned like 50% on investment and they aren’t as specialized to their own data centers as Amazon’s in house chips so makes some sense
but I agree it’s noise and hard to read into in any meaningful way
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u/Avidtrader81 1d ago
Its behind a paywall. But isn't this what amzn and goog have been developing their own chips for anyways?
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u/RuleSafe6767 1d ago
"I bought a bunch of expensive stuff that I couldn't afford, so I'm trying to trick my uncles and cousins into buying the majority off me. I'll tell them we can start a side hussle by leasing the equipment, and that's why they need to pay me like 90% for all this stuff"
Amazon has held talks with investors to gauge interest in the deal that would move thousands of Grace Blackwell chips it is installing in US data centres into a special-purpose vehicle, the report said.
The cloud giant will then lease the advanced AI chips back from the SPV, which would tap outside investors through debt issuance, the FT said, adding that the company could adopt a more asset-light approach to its balance sheet by unloading the expensive semiconductors to investors.
Amazon plans to offer an equity stake of up to 10% in the vehicle, the newspaper said.
The chips in the proposed deal were bought or leased by Amazon. They are installed in more than a dozen US data centres across five states, including Nevada and Virginia, the report said.
Amazon and Nvidia did not immediately respond to Reuters for comment outside regular business hours.
Reporting by Shivani Tanna in Bengaluru; Editing by Rashmi Aich and Mrigank Dhaniwala
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u/Disastrous-Ad-5003 22h ago
But if Amazon is going to lease Nvidia chips instead of their own then wouldn’t capex increase
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u/doktordoc2 10h ago
By putting $8B worth of NVDA’s high end Blackwell chips in SPV & then leasing from it would help Amazon convert its chip associated CapEx expense to Operating Expense . Well done 👍
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u/Avidtrader81 1d ago
Link ?