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AI Sector Pursues Off-Balance-Sheet Financing for Massive Chip Spending

Broadcom is reportedly assembling ~$60B (with banks) to lend up to $42B to Anthropic for chips as part of a $125B+ five-year lease. Amazon is exploring an SPV to offload ~$8B of Nvidia chips to outside investors while ramping capex over $200B.

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3 Sources, 7h ago, first seen 7h ago

TLDR

These moves highlight the enormous scale and circular financing dynamics in AI infrastructure, where hyperscalers fund chipmakers who supply them. The structures raise questions about sustainability, valuations, off-balance-sheet risks, and whether capital intensity is justified by returns. Amazon's SPV approach shifts hardware costs and reflects broader AI capex pressures amid high interest rates, keeping AI financing as a dominant market theme.

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3 Sources, first seen 7h ago

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Combined views

85.9K

3 Sources, first seen 7h ago

768 likes73 comments161 saves164 reposts

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3 Sources

@HedgieMarkets🦔Amazon is in talks to move $8 billion of Nvidia Grace Blackwell chips into a special purpose vehicle, sell debt against them to outside investors, and lease the chips back. The chips are already installed across data centers in at least five states. Amazon would keep up to 10% equity in the vehicle. My Take I think this is smart by Amazon and a terrible deal for whoever buys in. Amazon gets to keep using the chips, move $8 billion off its balance sheet, and protect its credit rating while it burns through $200 billion in capex this year. The investors get to own hardware that loses value every time Nvidia releases a new generation. Grace Blackwell is already one cycle behind Rubin. In two years it'll be two cycles behind. Airlines do sale-leasebacks with planes that fly for 25 years. These chips will be obsolete in five. I also think this is the first real crack in the "insatiable demand" story. If demand for these chips was as strong as Nvidia keeps saying, Amazon wouldn't need to find creative ways to get them off its books. You don't sell something you can't get enough of. You hoard it. Amazon is choosing liquidity over inventory, and I think more hyperscalers do the same thing within the next two quarters. Hedgie🤗7h
@zerohedgeAmazon, Broadcom Pile Into Off-Balance Sheet SPVs As AI Circularity "Undeniably Increasing" https://www.zerohedge.com/markets/amazon-broadcom-pile-balance-sheet-spvs-ai-circularity-undeniably-increasing6h
@leevalueroachIf only there were signs of a bubble. Amazon creating a special purpose vehicle to offload Nvidia chips. This is like some Enron shit. It is actually amazing to me how capital intensive all of these "tech" companies have become. Amazon is more capital intensive than a coal mine.5h
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    3 Sources

    @HedgieMarkets🦔Amazon is in talks to move $8 billion of Nvidia Grace Blackwell chips into a special purpose vehicle, sell debt against them to outside investors, and lease the chips back. The chips are already installed across data centers in at least five states. Amazon would keep up to 10% equity in the vehicle. My Take I think this is smart by Amazon and a terrible deal for whoever buys in. Amazon gets to keep using the chips, move $8 billion off its balance sheet, and protect its credit rating while it burns through $200 billion in capex this year. The investors get to own hardware that loses value every time Nvidia releases a new generation. Grace Blackwell is already one cycle behind Rubin. In two years it'll be two cycles behind. Airlines do sale-leasebacks with planes that fly for 25 years. These chips will be obsolete in five. I also think this is the first real crack in the "insatiable demand" story. If demand for these chips was as strong as Nvidia keeps saying, Amazon wouldn't need to find creative ways to get them off its books. You don't sell something you can't get enough of. You hoard it. Amazon is choosing liquidity over inventory, and I think more hyperscalers do the same thing within the next two quarters. Hedgie🤗7h
    @zerohedgeAmazon, Broadcom Pile Into Off-Balance Sheet SPVs As AI Circularity "Undeniably Increasing" https://www.zerohedge.com/markets/amazon-broadcom-pile-balance-sheet-spvs-ai-circularity-undeniably-increasing6h
    @leevalueroachIf only there were signs of a bubble. Amazon creating a special purpose vehicle to offload Nvidia chips. This is like some Enron shit. It is actually amazing to me how capital intensive all of these "tech" companies have become. Amazon is more capital intensive than a coal mine.5h
    Today's Rank

    #9

    Today's Rank

    #9