Amazon buys billions in GPU racks early

Under a new Early Rack Receipt process, AWS expected to receive roughly five billion dollars in Nvidia GB three hundred server racks at US facilities before final deployment, according to August internal emails.

More racks coming each month

The company projected roughly three billion dollars more in GB three hundred racks each month for the foreseeable future, according to one of the internal emails reviewed by Business Insider.

Power shortages leave systems idle

Some AWS sites had room for more racks but not enough available power to turn them on, leaving finished equipment staged at intermediary warehouses until facilities were ready.

Dark GPUs plague the industry

A lack of new electricity capacity has led to dark GPUs, where AI chips and servers are purchased but sit idle due to power supply issues or other challenges.

Cash flow turns negative

Amazon expects roughly two hundred twenty billion dollars in capital expenditures this year, more than any Big Tech peer. Its free cash flow turned negative last quarter for the first time since twenty twenty three.

The trade-off: speed over cash

For AWS, the trade-off is securing scarce GPU racks before competitors do, even if data centers aren't ready to turn them on. Taking ownership earlier ties up billions before generating cloud revenue.

Jassy sees once-in-a-lifetime opportunity

Amazon CEO Andy Jassy said the company has a clear line of sight to strong returns from AI investments, calling the technology a once in a lifetime opportunity in the annual shareholder letter.

“once in a lifetime opportunity”