Generac Holdings has signed a long-term agreement to supply backup generators for Amazon's data centers, with $2.4 billion of deliveries expected in 2027 and 20282. The deal, disclosed in a Generac regulatory filing after Wednesday's close, also grants Amazon a stock warrant that fully vests only if cumulative payments reach $8 billion — a threshold, not a confirmed order commitment.
Generac shares traded near $236 in premarket activity at 5:39 a.m. EDT on September 17, up 34.8% from Wednesday's $175.11 close, according to Yahoo Finance data cited by TechStock². That premarket quote is indicative rather than an official opening price.
Warrant structure and dilution
Amazon received a warrant for as many as 1,693,745 Generac shares at an exercise price of $200.9266. Of those, 307,954 vested immediately. The remaining shares vest in stages as Generac and its affiliates receive gross payments, after specified offsets, from Amazon for data-center backup generators. The maximum warrant covers roughly 2.9% of the approximately 59.0 million common shares outstanding at June 30, while the immediately vested portion represents about 0.5% on the same basis. Amazon may use a cash or cashless exercise before the warrant expires in September 2033. At the latest premarket quote, the $200.9266 exercise price sat about 14.9% below the share price.
Bloomberg's Michelle Ma first reported the deal as supplying Amazon with up to $8 billion worth of backup generators, with a warrant for up to a 2.6% stake1.
Scale against Generac's existing business
Spread evenly across 2027 and 2028, the $2.4 billion delivery expectation would average $1.2 billion a year. Generac reported $556.5 million of commercial and industrial sales in the second quarter, and total quarterly sales of $1.17 billion. On a simple annualized basis, the Amazon delivery average would equal about 54% of that segment's second-quarter sales rate. Generac's segment sales rose 29% from a year earlier. In July, Generac said its first hyperscaler agreement represented nearly $700 million of expected 2027 volume.
ANALYSIS The confirmed $2.4 billion delivery figure is large relative to Generac's existing commercial and industrial revenue base, but it is materially smaller than the $8 billion headline number that drove the initial market reaction. The $8 billion figure functions as a ceiling tied to warrant vesting, not as a backlog item.
Business Insider characterized the deal as evidence that the AI trade may be shifting away from chips and into power3. The agreement follows other large-scale AI infrastructure financing: a consortium of 10 banks recently extended a $22 billion loan to Crux AI, the cloud venture backed by Blackstone and Alphabet, to finance TPU purchases[2].
ANALYSIS Amazon's willingness to grant equity-linked incentives to a power-equipment supplier — rather than simply placing purchase orders — underscores the operational weight that reliable backup generation carries in data-center planning.