Key Takeaways
- Amazon secured warrants linked to Generac stock worth up to $340 million.
- Generac will supply Amazon with $2.4 billion in generators.
- The agreement supports Amazon’s growing data center infrastructure requirements.
The Amazon Generac Deal gives Amazon warrants to purchase up to $340 million worth of Generac stock as part of an agreement for backup power generators for its data centers. Generac shares rose more than 40% in extended trading on Wednesday following the announcement.
Generac Shares Surge After Amazon Agreement
Generac issued Amazon warrants covering up to 1.69 million shares at an exercise price of $200.93 per share. The warrants represent almost 3% of Generac’s outstanding shares.
The total value of the generators covered by the agreement could reach as much as $8 billion, based on the maximum number of shares subject to the warrants and their exercise price. Initial generator deliveries are expected to total $2.4 billion during 2027 and 2028.
Around 308,000 warrant shares vested immediately. The remaining portions will vest based on payments made for the generators.
Generac had a market capitalization of about $10.3 billion at Wednesday’s close. The size of the warrant arrangement makes Amazon a notable participant in the company’s future supply relationship.
The agreement links Amazon’s data center expansion with Generac’s power equipment business. Backup generators provide power when a facility loses its primary electricity supply, making them part of the infrastructure required for data center operations.
Amazon Web Services has been expanding its data center capacity as demand for computing infrastructure increases. The company has also entered several agreements involving technology and infrastructure suppliers.
The Generac deal adds power equipment to that broader infrastructure spending. The initial deliveries planned for 2027 and 2028 give Generac visibility into future orders tied to Amazon’s data center requirements.
Amazon Expands Its Data Center Supplier Network
Amazon has also used warrants and equity arrangements in other supplier relationships. The company recently agreed to use custom artificial intelligence chips from Qualcomm and received warrants to purchase as much as $4 billion of Qualcomm stock.
Other companies in which Amazon has purchased warrants or taken stakes include semiconductor company Astera Labs, air cargo contractor ATSG, green hydrogen supplier Plug Power, and grocery distributor SpartanNash.
The arrangements give Amazon financial interests in parts of its wider supplier network while securing access to products and services needed for its operations.
Amazon’s data center investment has expanded alongside demand for artificial intelligence computing. The company signed a $38 billion cloud agreement with OpenAI in November 2025. It also opened an $11 billion data center campus for Anthropic in Indiana in October 2025.
The Generac agreement adds another major infrastructure commitment to this expansion. Its focus is specifically on backup power generation for Amazon data centers.
For Indian businesses and entrepreneurs operating in technology, manufacturing, engineering, and infrastructure, the deal highlights the scale of supplier requirements created by data center expansion. Power equipment forms one part of the wider infrastructure needed to operate computing facilities.
The financial structure of the Amazon Generac Deal also connects a supplier relationship with an equity instrument. Amazon can acquire Generac shares through the warrants, while Generac receives a major generator supply commitment.
The immediate market reaction was strong, with Generac shares gaining more than 40% in extended trading. The agreement will continue through the planned generator deliveries in 2027 and 2028, while the remaining warrants will vest based on payments for the equipment.
