AWS will take ownership of Nvidia racks before deployment

Under Early Rack Receipt, AWS can pay for and record certain racks earlier in the supply chain.[1] The report said the process was expected to cover about $5 billion in Nvidia GB300 server racks at U.S. facilities before their final deployment.[1] That estimate was based on August internal emails reviewed by Business Insider, rather than a figure the report described as a completed deployment.[1]

Business Insider reported that some AWS sites had room for more racks but not enough available power to turn them on.[1] Finished equipment was being staged at intermediary warehouses until facilities were ready, and Amazon routinely stages finished hardware near deployment sites so it can install it once capacity becomes available.[1] An internal email said at least one AWS team lacked a clear forecast for when incoming racks would reach data centers.[1] For capacity planning, distinguish hardware expected or received from systems that are installed, powered and ready to serve workloads.

Business Insider described AWS’s choice as securing scarce GPU racks before competitors do, even when some data centers are not ready to use them.[1] Taking ownership earlier can tie up billions of dollars in equipment before it generates cloud revenue.[1] The report also said early investment can consume substantial cash if data centers are not ready to run, while the market had recently become less willing to lend against some projects.[1] Business Insider reported that an internal email projected roughly $3 billion more in GB300 racks each month for the foreseeable future.[1]

Business Insider reported that Amazon expected about $220 billion in capital expenditures that year, more than any Big Tech peer.[1] Its free cash flow turned negative in the prior quarter for the first time since 2023 and could remain negative for a while, the report said.[1] The company’s stated rationale, as reported by Business Insider, was that there was a “clear line of sight” to strong returns from AI investments and that the technology was a “once in a lifetime opportunity.”[1] The report said Amazon expected to feel similarly about its next wave.[1]