Generac Holdings (GNRC), a leading U.S. manufacturer of backup power equipment, filed documents with the U.S. SEC on September 16, disclosing a seven‑year long‑term supply agreement with Amazon Web Services (AWS) for standby generators supporting Amazon’s global AI data centers.
The $8 billion figure represents the maximum potential procurement cap, not a guaranteed minimum order. The initial committed purchase amounts to $2.4 billion, scheduled for delivery across 2027 and 2028. The contract will remain valid until 2033. Additional purchases will be subject to Amazon’s data‑center expansion pace, with total spending capped at $8 billion.
As a key part of the strategic partnership, Generac will issue warrants to an Amazon subsidiary. The warrants entitle Amazon to acquire up to 1,693,745 common shares at an exercise price of $200.93.
Approximately 307,954 shares vest immediately upon signing, accounting for roughly 18% of the total. The remaining warrants vest in tranches tied to cumulative purchase volumes. Full vesting of all warrants will only occur if Amazon hits the $8 billion spending threshold. The warrants expire on September 16, 2033, and may be exercised via cash or cashless settlement.
News of the contract sent Generac’s share price surging. Pre‑market gains topped 30%, while intraday highs neared 45%, marking its steepest one‑day advance since 2010.
Market analysts note that AI‑fueled data‑center capital expenditure has expanded beyond GPUs and servers to on‑site power infrastructure including backup generators and energy storage. Grid upgrades in many regions cannot keep pace with data‑center construction timelines, making on‑site standby power a critical workaround for major cloud operators.
Historically focused on residential and emergency‑response generators across North America, Generac is now repositioned as a core supplier for AI infrastructure. The landmark deal underscores that hyperscale cloud providers are locking in multi‑year industrial generator capacity, as backup power evolves from an auxiliary feature into a bottleneck resource for new data‑center deployments.