As Amazon's infrastructure spending accelerates, the company is turning to innovative financing mechanisms to sustain its aggressive buildout. A newly disclosed supplier financing arrangement allows the firm to borrow as much as $80B using its hardware acquisitions as security, with access available from early 2027 through late 2028.
The facility represents a strategic pivot for a company that has historically relied on operational cash flows and debt markets to fund expansion. During the 12-month period ending in September, Amazon experienced a free cash outflow of $42.4B, while its capital commitments ballooned to $883B—more than double the prior year's level.
The arrangement grants lenders security interests in certain equipment procured through the financing, though Amazon's regulatory filing does not specify which assets carry this encumbrance. The company can access funds beginning in 2027 and continuing into the third quarter of 2028.
Historically, Amazon has financed its infrastructure through earnings generated by AWS and its retail operations, supplemented by substantial bond offerings in recent periods. Meanwhile, competitors have pursued alternative strategies: Alphabet is raising $80B through equity sales, while others have negotiated cost-sharing arrangements with investors or structured leasing agreements for semiconductor purchases.
AWS Chief Executive Matt Garman explained the rationale to Bloomberg Television, stating: "When we see such a really large opportunity in front of us, we're looking for ways to also responsibly fund that so that we can go as big as possible for our customers."
The scale of Amazon's debt burden has grown substantially. By June, the company's outstanding debt exceeded $225B following a $17.5B credit facility led by Citigroup. Across the sector, the largest artificial intelligence investors now collectively carry approximately $350B in debt obligations.
Source: The Next Web
