Amazon received warrants to buy up to $340 million in Generac stock as part of a backup power supply agreement for its data centers, sending Generac shares up more than 40% in after-hours trading.
Amazon was granted warrants to purchase up to $340 million worth of Generac stock as part of a supply agreement that will see the backup power company deliver generators to Amazon's data centers, sending Generac shares surging more than 40% in extended trading on Wednesday.
According to a securities filing, Generac issued warrants to Amazon to acquire up to 1.69 million shares at $200.93 apiece, for a total potential investment that could reach as much as $8 billion.
Initial generator deliveries under the agreement are expected to total $2.4 billion across 2027 and 2028, the filing states. Approximately 308,000 warrant shares vested immediately, with the remaining tranches contingent upon payments for the equipment.
The warrants represent nearly 3% of Generac's outstanding shares. The company's market capitalization stood at roughly $10.3 billion as of Wednesday's close.
The deal is the latest in a string of infrastructure-related warrant arrangements for Amazon. Last week, the company struck an agreement with Qualcomm to use its custom artificial intelligence chips and obtained warrants to acquire as much as $4 billion in Qualcomm stock.
Amazon Web Services, the dominant player in cloud infrastructure, has been aggressively expanding its data center footprint to accommodate a surge in compute demand driven by AI workloads. The company signed a $38 billion cloud agreement with OpenAI last November and opened an $11 billion campus for Anthropic last October.
Amazon has a well-established pattern of taking equity stakes in key suppliers. Its portfolio of such arrangements includes semiconductor firm Astera Labs, air cargo contractor ATSG, green hydrogen supplier Plug Power, and grocery distributor Spartan Nash.
The Generac deal underscores the scale of the physical infrastructure buildout that AI-driven cloud expansion demands, with reliable backup power becoming a critical procurement priority for the industry's largest operators.
Wednesday's warrant disclosure comes amid broader market attention to AI infrastructure spending. Federal Reserve Chair Kevin Warsh, speaking to reporters after the Federal Open Market Committee raised interest rates by a quarter point, said the central bank is watching the sector closely. "We care very much about what's happening in artificial intelligence," Warsh said.
As hyperscalers race to secure every link in the data center supply chain — from chips to power to cooling — equity-linked supplier agreements are emerging as a favored mechanism for locking in capacity while aligning vendor incentives with long-term infrastructure commitments.
Jay Goldberg is a staff writer at TechEchelon covering technology, markets, and policy. He files the breaking news and deal coverage that move the publication's core desks.
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