Amazon has struck a long-term supply agreement with Generac for backup generators supporting its data center buildout, tying one of the cloud industry’s largest infrastructure programs to a manufacturer that has been rapidly expanding into the hyperscale power market.
Under the agreement disclosed in a Sept. 16 regulatory filing, Generac expects initial deliveries to Amazon totaling approximately $2.4 billion during 2027 and 2028. The commercial relationship could ultimately involve as much as $8 billion in qualifying generator purchases.
The agreement also gives Amazon an equity interest in Generac’s success. Generac issued Amazon.com NV Investment Holdings a warrant to acquire as many as 1.69 million Generac shares at an exercise price of approximately $200.93 per share. About 308,000 shares vested when the agreement was signed, with additional tranches vesting as Amazon’s purchases increase. The warrant remains exercisable through September 2033.
The distinction is important: the frequently cited $8 billion figure represents potential cumulative payments by Amazon for backup power generators, rather than an $8 billion equity investment. The maximum warrant covers roughly $340 million of Generac stock at the stated exercise price.
CNBC first highlighted the equity component of the transaction, reporting that Generac shares surged more than 40% in extended trading following disclosure of the agreement. The shares ultimately gained about 18% during the following regular trading session.
Generac Was Already Scaling for the Data Center Market
For the data center industry, however, the more consequential part of the transaction may be the size and duration of Amazon’s equipment commitment.
Generac has spent much of the past two years positioning itself as an alternative large-megawatt generator supplier as AI infrastructure development puts pressure on established power-equipment supply chains. DCF previously examined Generac’s push into hyperscale backup power, including its effort to shorten generator lead times and support campuses requiring hundreds of units.
By July 29, Generac said its data center product backlog had reached approximately $1.6 billion — before including committed volumes from a second hyperscale customer. Commercial and industrial sales increased 29% year over year during the second quarter, driven partly by data center demand.
An August investor presentation described a global supply shortfall for large diesel generators and said Generac expected to have more than $1.25 billion of annual large-megawatt generator manufacturing capacity in place by the fourth quarter of 2026. The company outlined a path to roughly triple that capacity by the end of the third quarter of 2027.
That expansion has included the acquisition of Enercon Engineering, bringing generator packaging and switchgear capabilities in-house, as well as new manufacturing and packaging facilities intended to support large-scale commercial and data center deployments.
The capacity question has been developing for some time. In a 2025 DCF Show discussion, Generac executives identified lead time as one of the dominant concerns coming from hyperscale customers and described an effort to deliver large generator sets significantly faster than prevailing industry timelines.
Hyperscalers Secure the Supply Chain
The structure of the Generac agreement also resembles a broader Amazon infrastructure procurement strategy.
Earlier in September, Qualcomm granted Amazon warrants to acquire as many as 25 million Qualcomm shares in conjunction with a multi-generation agreement covering server silicon, AI infrastructure and optical connectivity. Vesting under that agreement is tied to commercial milestones and purchases that could total as much as $60 billion.
The two transactions span very different layers of the data center stack — semiconductors and backup generation — but point toward the same underlying requirement: hyperscalers increasingly need to secure critical infrastructure capacity years before the associated data centers reach operation. That strategy reflects a broader shift DCF has tracked as hyperscalers standardize equipment and reserve long-lead electrical infrastructure across multiple projects.
For generators in particular, that procurement cycle is becoming intertwined with the broader race for transformers, switchgear and other long-lead electrical equipment. Utilities and developers have increasingly moved toward multiyear commitments as AI data center construction absorbs manufacturing capacity across the power equipment supply chain.
The procurement race is unfolding as AI data centers increasingly become power systems in their own right, combining grid service, onsite generation, storage and controls to meet increasingly demanding reliability and deployment requirements.
For Generac, Amazon provides one of the clearest validations yet of the company’s push from its traditional power-generation markets into hyperscale infrastructure.
For Amazon, the agreement secures something arguably just as important as GPUs in the AI buildout: the equipment required to keep gigawatt-scale compute online when the grid is not.
