Amazon's $496B Backlog Meets a Power Bottleneck

Amazon chief executive Andy Jassy said in an a16z podcast published on 23 October that AWS has sold out its 2026 capacity, filled most of 2027 and pre-booked a significant share of 2028, against planned capital expenditure of about USD 220 billion this year. AWS carried a record USD 496 billion backlog at the end of the second quarter, and the company has begun accepting server racks before sites are ready, taking delivery and paying earlier to lock hardware supply.

The counterpart to that demand is physical. AWS has taken delivery of Nvidia GB300 racks worth roughly USD 5 billion that cannot be energised where they are installed and are being held in warehouses and transit facilities, with purchases running near USD 3 billion a month. The industry term is dark GPUs: compute that is bought, depreciating and not yet producing revenue. Amazon's trailing twelve-month free cash flow turned negative at about USD 7.6 billion.

The cost structure explains why the bottleneck moved. Bank of America research cited on 25 October puts an average one-megawatt data centre at USD 49 million, with 78 percent of that in IT equipment: roughly USD 31.4 million per megawatt for servers and USD 4.8 million for network gear. Global data-centre investment is forecast to more than double from USD 1 trillion in 2024 to USD 2.1 trillion by 2028.

Read the other way, 22 percent of a build is electrical and mechanical plant, and that share rises as rack density climbs. Switchgear, busway, transformers, UPS and battery cabinets, liquid-cooling distribution units and rear-door heat exchangers are now schedule-critical items with their own lead times. A hyperscaler that can buy chips but not energise them becomes a buyer of electrical capacity at almost any price.

For component suppliers the lesson is to sell into the megawatt, not only into the rack. Current and temperature sensing, contactors, solid-state breakers, fan and pump drives, isolated gate drivers and power monitoring all scale with installed electrical capacity, and they are specified earlier in the project than the servers that eventually populate the hall.

Our catalogue includes parts used in power distribution and telemetry, such as the INA238 85V power monitor, the TPS546D24A 40A converter and the DRV8316 motor driver for pump and fan control.