Generac Holdings has signed an agreement to supply backup generators for Amazon’s data centres, with initial deliveries expected to be worth nearly $2.4bn in 2027 and 2028.
The US power equipment maker disclosed the long-term arrangement in a regulatory filing. Its shares rose nearly 18% on 17 September morning trading following news of the agreement.
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As part of the agreement, Generac issued a warrant to Amazon NV Investment Holdings allowing it to acquire up to 1.69 million Generac shares at an exercise price of $200.93 each.
The warrant represents nearly 3% of Generac’s outstanding shares and can be exercised until September 2033.
About 307,954 shares vested immediately. The remaining shares will vest in stages linked to Amazon’s purchases of backup generators.
Those purchase-related stages cover up to $8bn in aggregate payments from Amazon under the arrangement.
The initial deliveries are expected to take place across 2027 and 2028, while the warrant’s exercise period extends beyond that timeframe.
Amazon has previously received warrants from suppliers in connection with its AI and cloud infrastructure buildout. The companies involved include hydrogen producer Plug Power and air cargo contractor Air Transport Services Group (ATSG).
Earlier this month, Qualcomm Technologies and Amazon entered into a multi-generation partnership to design customised silicon and optical connectivity solutions for large-scale AI data centres.
The companies plan to jointly design silicon for use in Amazon Web Services (AWS) data centres, specifically for AI inference tasks.
Amazon Web Services (AWS) announced plans to deploy two million Nvidia graphics processing units (GPUs) across its global data centre infrastructure in 2027 and 2028.
