Amazon seeks to offload $8B of Nvidia chips to investors

burnte

The beginning of the bubble deflate?

vel0city

I'm just trying to understand this more, can someone please give more insight? So Amazon bought a bunch of nVidia hardware, and has been installing it in their datacenters. These are supposedly in-service for Amazon customers, a lot of it available and in-use today. This is creating a SPV company, have that SPV take out loans, have the SPV buy the hardware still installed in Amazon's datacenters, and then Amazon rents the hardware they previously bought and installed from the SPV? This sounds like an expensive shell game paying expensive finance bros to make some numbers on papers look a little different. What do they really gain from this? Is this just because Amazon wants ~$8B in cash today, like taking a cash-out refinancing on your home? Doesn't Amazon have over a hundred billion dollars in cash on hand? If you've got a pile of money in your house sitting around, why would you do a cash-out refinancing at a time of high interest rates?

eigenspace

Nothing to see here folks. Nothing at all.

xnx

Also today: Nvidia stock hits new all-time high

prometheus1992

are they trying to pull off what meta did? link - https://www.reuters.com/legal/transactional/meta-set-clinch-...

cmiles8

It’s starting… buckle up folks. It’s a shame we won’t have Anthony Bourdain to explain this move to us in the AI implosion docu-flick that comes out in 2029. It’s not stale fish, it’s fish stew! It’s a whole new thing!

jms703

Meanwhile I can't afford a new gpu or ram...or cpu now.

sourdecor

Chips are automatically a depreciating asset - is there a historical basis for understanding how that affects companies, and how that will affect GPU-centric companies?

ChrisArchitect

Earlier: https://news.ycombinator.com/item?id=49930027

trollbridge

A somewhat more accurate headline would be "Amazon seeks to leaseback a bunch of chips, many of which it's using, but some are just sitting around in a warehouse". Entirely sensible move on their part, and no, it's not a sign of a bubble bursting; it's a sign of nVidia chips becoming a tradeable, fungible commodity, which is an extremely good thing for nVidia.

Aurornis

> Amazon plans to offer an equity stake of up to 10% in the vehicle, the newspaper said. 10% is not a lot. There is a lot of investment money looking for any AI investment right now. Family offices through large institutional investors have made mandates to allocate to AI investments. Amazon is in a perfect position to scoop up some of those investment dollars. This is an easy way for them to take advantage of the market conditions. The doomers are going to assume this is a sign of bubble bursting, but I think Amazon is being smart and weighing their options for financing. If you haven’t kept up with the markets, rates have gone up a lot. If investors are willing to hand you cash to finance your buildout in exchange for something like this, it’s worth considering.

sgjohnson

I'll take a pallet of Nvidia DGX H200s for $200 + shipping. Let me know when I can order them by weight on ebay.

shermantanktop

Capital-intensive business + smart lawyers and accountants = exotic financing schemes. Not a new thing, is it?

bushido

Our generation's very own mortgage-backed securities. Now we just need ratings on the GPU bundles, and eventually a clever way to rebundle the lower rated bundles into something that somehow comes out AAA. (for those unaware that's how the sub-prime mortgage crisis of 2008 happened)

DrProtic

Noise. When problems with AI investments become a problem the stock market will already communicate it, news will report it after the fact, not before.

kingstnap

> the deal that would move thousands of Grace Blackwell chips it is installing in US data centres into a special-purpose vehicle > The cloud giant will then lease the advanced AI chips back from the SPV I mean nothing is disappearing off the balance sheet. They have this lease agreement they will need to pay. I would watch for what they do with the freed up cash though. If they use these GPUs they already own as collateral to *double down* on buying more GPUs then we got some serious downturn risk building because its leveraged. Btw this is like 100% what Jensen was saying when he said gpu compute would be an "investable asset class".

GaryNumanVevo

well that's one way to guarantee I can get a GPU reservation on AWS now

tibbydudeza

2008 is calling again - SPV's of subprime mortages.