What happened?
Amazon has established a supplier financing facility that allows it to borrow up to $80B against the hardware it buys. The facility is set to be usable from 2027 through late 2028.
Why it matters
Amazon reported a free cash outflow of $42.4B in the year to September, with spending commitments reaching $883B. The move signals that the company is preparing to support its large-scale hardware purchases for AI infrastructure through an off-balance-sheet financing structure.
What is supplier financing?
Supplier financing is a borrowing arrangement that helps a company pay the manufacturers it buys from. With this structure, Amazon aims to spread the cash-flow pressure of its hardware purchases over time.
