Generac Signs $2.4 Billion Supply Deal with Amazon for Data Center Backup Power
Generac Holdings Inc. (GNRC) has signed a long-term supply agreement to provide backup generators for Amazon data centers, potentially worth up to $8 billion in cumulative payments over time. The initial deliveries are expected to be valued at approximately $2.4 billion by 2027 and 2028. As part of the deal, Generac issued a warrant allowing Amazon NV Investment Holdings to purchase up to 1.69 million shares at $200.93 per share. The agreement expands Generac's exposure in the data center market as demand for reliable power infrastructure grows with cloud computing and AI expansion. The company has already reported a $1.6 billion backlog from its existing hyperscale customers, excluding Amazon’s contribution. To meet rising demand, Generac plans to invest around $250 million by 2027 in production capacity. However, risks include manufacturing bottlenecks, supply chain constraints, and customer concentration risk due to reliance on a single major client.
Topics: AI Infrastructure Backup Power Systems Data Center Infrastructure