Amazon has created a supplier financing facility to borrow up to $80B against the hardware it buys, with funds usable from the start of 2027 until the third quarter of 2028, according to The Next Web. The company disclosed the move in its quarterly filing on Thursday following heavy spending on AI data centres, Bloomberg reported.
Key takeaways
- Amazon set up a loan facility to borrow up to $80B against hardware purchases.
- The funds can be drawn from early 2027 to late 2028.
- Lenders receive rights over some of the equipment purchased with the facility.
- Amazon reported a free cash outflow of $42.4B in the year leading up to September.
What is the amazon supplier financing facility?
The newly arranged loan facility lets Amazon draw on money from the start of 2027 until the third quarter of 2028. Lenders get rights over some of the equipment bought using the money, though the filing does not specify which items are included. Until this point, Amazon has paid for its build-out using cash generated by AWS and its retail business, alongside record bond sales during the year.
Rivals have turned to different deals, such as sharing AI data centres costs with investors or leasing chips bought by others. Alphabet is raising $80B by selling shares. AWS chief executive Matt Garman told Bloomberg Television that when the company sees a large opportunity, it looks for ways to responsibly fund it to go as big as possible for customers.
How much is total amazon debt?
The heavy spending has drained Amazon's cash reserves significantly. The company suffered a free cash outflow of $42.4B in the 12 months leading to September, while its total spending commitments hit $883B, which is more than double the figure from a year earlier. Meanwhile, amazon debt had already passed $225B in June following a $17.5B loan led by Citigroup. Taken together, the biggest spenders in the tech industry now owe about $350B.
What it means for future spending
The new financing option gives Amazon another avenue to pay for its massive infrastructure build-out without relying solely on cash and bond sales. With spending commitments doubling over the prior year and cash outflows mounting, the upcoming facility helps back the massive push into technology hardware as competition heats up across the industry.
Frequently asked questions
Amazon can borrow up to $80B against the hardware it buys through the newly established supplier financing facility.
Amazon can draw on the money from the start of 2027 until the third quarter of 2028.
AWS chief executive Matt Garman told Bloomberg Television that the company looks for ways to responsibly fund large opportunities so it can go as big as possible for customers.
Amazon had a free cash outflow of $42.4B in the 12 months leading up to September.
Amazon's debt had already passed $225B in June after the company took on a $17.5B loan led by Citigroup.
Based on reporting by The Next Web. Read the original article
