The generator manufacturer Generac and the cloud corporation Amazon have entered into a long-term supply contract for emergency power technology for data centers, as stated in a communication to the US Securities and Exchange Commission SEC. The total volume could rise to up to eight billion dollars, of which 2.4 billion dollars have already been contractually agreed for the years 2027 and 2028.
Warrant links Amazon’s stake to future payments
The warrant includes up to 1,693,745 Generac shares at an exercise price of 200.93 dollars per share. Amazon can immediately exercise around 308,000 shares, while the remainder will only be unlocked once Generac receives actual payments from the supply contract – staggered up to the eight billion dollar limit. The warrant runs until September 16, 2033. According to press reports, Amazon could thus acquire a stake of around three percent in Generac; the SEC communication itself does not specify a percentage value.
Amazon can exercise the warrant either in cash or in kind, that is, by offsetting it against the share value. The communication also grants Amazon registration rights for the shares, allowing the corporation to sell the shares on the market later without applying for a separate approval. Such warrants economically bind suppliers to their major customers: If the share price rises as a result of the order, the buyer additionally benefits from the price gain without having to act as a permanent shareholder. For Generac, the large order secures the utilization of its own production over several years, regardless of the short-term price development of its own stock.
Generac stock fluctuates significantly after record jump
Generac published the communication on Wednesday evening, and the stock jumped by up to 45 percent in after-hours trading. On Thursday, the price fluctuated between around 250 and 208 dollars, after being around 175 dollars before the announcement – an increase of about 19 percent at the close of trading. CEO Aaron Jagdfeld stated, according to the US broadcaster WPR, that the agreement positions the company for “this generational growth opportunity.”
Generac manufactures emergency power generators for households and businesses and employs more than 4,800 people at eleven locations in Wisconsin, including seven manufacturing plants. The data center business grew by 29 percent in the second quarter of 2026 and was the main driver of commercial revenue growth. The deal comes at a time when the power demand from AI data centers has increased by 50 percent worldwide in 2025, according to data from the International Energy Agency – significantly faster than the overall data center electricity consumption at 17 percent or the global electricity consumption at 3 percent.
Similar warrant deals are increasing in the industry
Comparable structures have recently become more common: Just in September, Amazon secured similar purchase options in a 60 billion dollar chip supply contract with Qualcomm. Nvidia, in turn, secured up to three billion dollars for about one-fifth of the power supplier Lancium in August. The software company Oracle also received a warrant for 400 million dollars on the fuel cell manufacturer Bloom Energy in April, after both companies had expanded their collaboration to up to 2.8 gigawatts.
Even in network expansion itself, major AI providers are now cooperating directly: Google, Nvidia, and Anthropic founded a power alliance for AI data centers in September with 18 other partners, aiming to unlock around 100 gigawatts of additional grid capacity in the USA. In contrast, the Generac deal does not rely on grid connection but on autonomous emergency power supply on-site. Amazon itself is simultaneously advancing its own power plant projects, such as a gas power plant in Texas with up to 7.65 gigawatts of capacity for a new data center.
It remains to be seen whether Amazon will actually fully exercise the warrants or only hold them as a hedge as long as the Generac stock fluctuates. It will also be crucial whether Generac can call off the 2.4 billion dollars in orders promised for 2027 and 2028 – the remaining 5.6 billion dollars of the eight billion dollar framework depend on yet-to-be-specified follow-up orders.
