Amazon Stockpiles Billions in NVIDIA GB300 Racks Due to Power Bottlenecks, Turning Free Cash Flow Negative

According to a report by Business Insider citing Amazon internal documents and recordings of AWS employee meetings, Amazon Web Services (AWS) is facing a severe power supply bottleneck. Although Amazon imports billions of dollars worth of NVIDIA's latest GB300 rack systems every month, a lack of connected power at data centers prevents timely deployment, forcing the company to temporarily stockpile large amounts of equipment in intermediate warehouses.

To gain an edge in the fierce AI chip competition, Amazon launched a new "Early Rack Receipt" process in August 2026, importing approximately $5 billion in equipment that month alone, with plans to purchase about $3 billion in GB300 racks monthly thereafter. This model shifts away from the traditional pay-after-installation structure, creating a financial situation where capital is spent upfront while revenue generation is delayed. The AWS supply chain team acknowledged there is currently no clear path to installing these racks into data centers. In response, Amazon stated that completing equipment deployment before power is ready is an industry norm.

This backlog has directly impacted financial performance. During internal meetings in September, AWS CFO John Felton and Head of AI Infrastructure Prasad Kalyanaraman discussed the company's negative free cash flow (FCF). Kalyanaraman noted that the AI business faces massive cash flow losses, expected to remain negative for approximately the next two years. Data shows that as of the second quarter of 2026, Amazon's trailing twelve-month free cash flow deficit reached $7.6 billion, while capital expenditures for 2026 are projected at $220 billion. Amazon originally expected to resolve the shortage by 2027 but now predicts demand will continue to exceed deployed capacity through that year.