Amazon lines up $80B supplier financing to fund AI

Amazon Amazon.com, Inc. ↘ 1.41% has set up supplier financing arrangements that let it borrow as much as $80 billion against the value of hardware it buys. Bloomberg described the move as the company's latest effort to keep financial flexibility while it spends hundreds of billions of dollars on artificial intelligence infrastructure. The terms appear in Amazon's quarterly report for the period ended September 30, which it filed with the SEC on October 30. The same filing shows the company's total spending commitments rose to $883 billion.bloomberg.com+1

How the Facility Works

Amazon can borrow under the arrangement at its discretion from the first quarter of 2027 through the third quarter of 2028, TokenPost reported from the filing. How much it can draw depends on the size, timing and pricing of its orders. Loans will carry variable interest rates, and each one is due five years after it is drawn. Lenders will get security interests in some of the purchased assets, and any outstanding balances will be counted as long-term debt. The filing does not say which assets will secure the loans, according to Investing.com via Yahoo Finance.finance.yahoo.com+1

The $80 billion is a ceiling, not money Amazon has already borrowed, and the disclosure does not mean the company will use all of it. Separately, Amazon took out a $17.5 billion unsecured term loan in September that is due in September 2029.tokenpost.com

Commitments Climb as Cash Flow Turns Negative

Amazon's total spending commitments reached $883 billion at the end of September. That figure covers debt and interest, leases that have not yet started, obligations to buy property and equipment, and other items. It is up 36% from three months earlier and more than double the level a year ago.finance.yahoo.com

The heavy spending has also hit free cash flow. For the 12 months ended September 30, operating cash flow rose 29% to $168.3 billion, but free cash flow was an outflow of $42.4 billion, compared with an inflow of $14.8 billion a year earlier. The swing came after a $94.8 billion jump in purchases of property and equipment, which Amazon said was mainly for AI. Amazon shares fell about 2% at midday on Friday, a day after the company reported larger-than-expected capital spending for the third quarter.stocktitan.net+1

A New Funding Channel

Until now, Amazon has paid for data centers and chips with cash from its cloud and retail businesses and with its largest-ever corporate bond sales. Amazon Web Services CEO Matt Garman said in a media interview on Friday that the company is looking for ways to fund its opportunities "responsibly" so that it can "meet customer demand at the largest possible scale," according to Futu News. The same outlet said Amazon kept its 2026 capital spending forecast at about $220 billion.news.futunn.com+1