Generator manufacturer Generac has signed a long-term agreement to supply backup generators to Amazon's data center portfolio, disclosed in a filing with the US Securities and Exchange Commission. Initial deliveries will total approximately $2.4 billion over the next two years, with the longer-term potential value reaching up to $8 billion. The deal includes a provision allowing Amazon to acquire up to nearly 1.7 million Generac shares at approximately $200 per share, with an option to purchase 300,000 shares immediately. Generac CEO Aaron Jagdfeld called the agreement a significant milestone that provides visibility into the company's multi-year growth and its investments in vertically integrated large-megawatt generator manufacturing capacity.
A single supply agreement with a potential value of $8 billion illustrates the extraordinary scale of data center backup power demand, and positions Generac as a primary long-term infrastructure supplier to one of the world's largest hyperscalers. The equity warrant provision also creates a financial alignment between the two companies over an extended period, a structuring approach that is relatively uncommon in traditional equipment supply contracts.
A $10 billion regional investment commitment by Microsoft into Gulf states is a major international market story, reflecting hyperscaler expansion into the Middle East and new geopolitical dimensions of data center growth.