Amazon.com, Inc. Signs $8 Billion Backup Power Deal With Generac

Amazon.com, Inc. entered into a long-term supply agreement with Generac Holdings Inc. to provide industrial backup power generators for its global data centers. The deal includes committed deliveries valued at $2.4 billion across 2027 and 2028, with total potential payments reaching $8 billion. This infrastructure expansion is part of a broader strategy by Amazon Web Services to increase data center capacity for artificial intelligence compute demand.

As part of the arrangement, Generac issued warrants to an Amazon subsidiary to purchase up to 1,693,745 shares at an exercise price of approximately $200.93 per share, a potential investment exceeding $340 million. While 308,000 shares vested immediately, the remaining tranches will vest as Amazon makes payments toward the $8 billion threshold. The warrants remain exercisable through September 16, 2033.

Generac shares surged more than 30% following the announcement, marking the company's largest one-day gain on record. Analysts noted the deal provides financial visibility as Generac works to triple its manufacturing capacity for large-format generators by August 2027. The agreement shifts Generac's earnings profile away from residential generators toward commercial and industrial growth, with some estimates suggesting the contract could add more than 20% to the company's total EBITDA by 2028.