Dark AI Clouds: Like every other hyperscaler willing to sacrifice everything to turn AI into a breakthrough opportunity, Amazon is pulling off some bold stunts with both its finances and its hardware. A new report suggests the company is buying more GPUs than it can run.
Amazon is reportedly taking in billions of dollars’ worth of Nvidia racks every month, even though some sites aren’t ready for it yet and there’s no power to power the AI accelerators yet. According to internal emails seen by Business Insider, Amazon is willing to commit billions of dollars upfront as long as it can secure new hardware capacity early.
The news details Amazon’s Early Rack Receipt process, through which AWS was expected to take delivery of around $5 billion worth of Nvidia GB300 server racks in August alone, with about $3 billion more expected each month for the foreseeable future. Amazon will receive servers “built for the age of AI thinking” ahead of the final deployment phase.
Some US-based AWS facilities do not have enough power to install and power up the servers, meaning the expensive hardware is stored in “temporary storage facilities” until the final data center location is completed. In the emails, an Amazon team complained that there is no clear forecast for the actual installation of all the GPUs the company purchases each month.
Amazon’s lack of power capacity is part of a growing phenomenon known as “dark GPUs.” Data center and cloud giants are piling up as much hardware as they can, but much of it is effectively gathering dust on the shelves while the rest of the IT industry is left in the trash.
The dark GPU problem also increases financial pressure on data center companies. Amazon’s trailing free cash flow turned negative in the second quarter for the first time since 2023, and the company expects it to stay that way for a while, with capital spending expected to reach around $220 billion this year.
Amazon is spending more than any other hyperscaler to build new AI capabilities and data center capacity and is changing its usual business practices to do so. Before the AI trend, AWS only took delivery of the racks after they were completed and delivered to a data center. Now the company founded by Jeff Bezos is poised to spend billions up front to secure more AI racks earlier in the supply chain.
An Amazon spokesman defended the approach, calling the practice of storing finished shelves in a warehouse “best business practice.” The company ultimately expects significant financial returns from this massive build-up of AI infrastructure, because AI is a unique opportunity that no IT company can miss. AWS has been through something similar before, said Amazon CEO Andy Jassy.
