Amazon.com Inc. plans to transfer Nvidia Corp. chips with a total value of around $8 billion to the balance sheet of a separate entity, for which it intends to attract external investors, the Financial Times reports, citing sources.
In recent weeks, the company has been in talks with potential investors to gauge their interest in such a deal.
Amazon intends to transfer thousands of Grace Blackwell chips, which it deploys in data centres across the US, to a special purpose vehicle (SPV). The company will lease these chips from the SPV, which is expected to attract external investors by issuing debt securities.
Sources report that transferring the expensive chips to a separate entity will enable Amazon to ease its balance sheet.
Tech giants are seeking unconventional ways to finance large-scale expenditure on data centre infrastructure, writes the FT. The bulk of these costs is accounted for by the chips used to train advanced AI models.
Companies are seeking to move debt off their balance sheets to maintain their creditworthiness, using various schemes to do so.
Investors expect Amazon’s SPV to receive an investment-grade credit rating, based on the company’s own rating. This will enable the deal to attract a wider range of investors, in particular insurance companies and pension funds.