Amazon Web Services expected to receive roughly $5 billion in Nvidia GB300 racks, but some sites lack the power to switch them on. The gap leaves equipment in warehouses while Amazon's AI spending pressures its cash flow.
AWS is buying Nvidia's GB300 server racks faster than some of its data centers can power them. AWS expected to receive roughly $5 billion in GB300 racks at US facilities under a new Early Rack Receipt process, according to August internal emails reviewed by Business Insider.
The same emails projected roughly $3 billion more in GB300 racks each month for the foreseeable future. Previously, AWS took ownership of a finished rack only upon delivery to a data center, according to internal documents.
Racks wait in warehouses for electricity
People familiar with the effort said some AWS sites had room for more racks but not enough available power to turn them on. Finished equipment was staged at intermediary warehouses until the facilities were ready.
Amazon disputes part of that picture. A spokesperson said the company routinely stages finished hardware near deployment sites and called the practice best business practice. The spokesperson also disputed that the broader company lacked a path for getting racks into data centers.
Spending weighs on free cash flow
The racks are one piece of a larger buildout. Amazon expects roughly $220 billion in capital expenditures this year, more than any Big Tech peer, and its free cash flow turned negative last quarter for the first time since 2023.
Internal comments point the same way. According to Crypto Briefing, AWS vice president of infrastructure Prasad Kalyanaraman described the AI business as "hugely free cash flow negative" and said he expects those conditions to continue for at least the next few years.
Taking ownership of racks earlier can tie up billions in equipment before it starts generating cloud revenue, Business Insider reported. For AWS, the trade-off is securing scarce GPU racks before competitors do.
Sources: Business Insider, Crypto Briefing
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