Amazon.com Inc. has arranged to borrow as much as about $80 billion against the computer hardware it buys, a new and secured form of financing for a company whose spending on data centers has pushed its free cash flow deep into negative territory.
The arrangement, disclosed in Amazon’s quarterly report filed Oct. 30, consists of supplier financing for technology infrastructure purchases that includes a secured loan facility. Amazon can draw on it at its discretion from the first quarter of 2027 through the third quarter of 2028. Each borrowing accrues interest at a variable rate and matures five years after it is drawn. Amazon will grant lenders a security interest in certain purchased assets. The filing didn’t name the lenders or suppliers, the interest margin or the specific equipment, and said the size could vary with the timing of purchase orders and pricing.
A first for Amazon
Until now, Amazon has paid for its build-out mainly with cash from its cloud and retail businesses and with large unsecured bond sales, avoiding the joint ventures and chip-leasing structures some rivals have used. Amazon Web Services chief Matt Garman said the company is looking for responsible ways to fund a very large opportunity so it can go as big as possible for customers.
The need is plain in the numbers. Purchases of property and equipment reached $77.3 billion in the third quarter, up from $35.1 billion a year earlier, and trailing free cash flow swung to an outflow of $42.4 billion. Long-term debt climbed to $173.1 billion at Sept. 30 from $65.6 billion at the end of 2025, including a $17.5 billion unsecured term loan drawn in September. Amazon’s total contractual commitments reached about $883 billion, up 36% in three months. The company still expects about $220 billion of capital spending this year.
Creditors’ pecking order
The security interest sets the facility apart. All of Amazon’s other borrowings are unsecured, so lenders here would have a claim on specific equipment that bondholders lack. The structure resembles other hardware-tied deals in the AI build-out, such as the $63 billion chip financing tied to Anthropic, and contrasts with Microsoft’s $25 billion general-purpose bond sale. Amazon hasn’t said how much of the facility it expects to use; the first draws could show up in filings for early 2027.
