The backup-generator maker just became one of the more direct plays on the least glamorous bottleneck in the AI buildout: electricity.
Generac Holdings shares surged more than 30 percent in early trading Thursday after the company signed a deal to supply backup-power generators for Amazon's data centers.
Under the agreement, Generac expects to deliver $2.4 billion worth of generators to Amazon between 2027 and 2028. As part of the arrangement, Generac has also granted Amazon the right to purchase up to $340 million of Generac stock. Amazon shares rose about 1.3 percent on the news.
Why a generator maker is suddenly an AI story
Data centers built to run artificial intelligence workloads require enormous, continuous power, and utilities in many regions cannot expand grid capacity fast enough to keep pace with demand. Backup and supplemental power generation has become one way operators bridge that gap, turning a business historically tied to storm-driven residential demand into a direct beneficiary of AI infrastructure spending.
What to watch
Whether other data center operators strike similar arrangements with power-equipment makers will determine whether Thursday's move reflects a one-off contract win or the start of a broader pattern connecting backup-power suppliers to the AI capital-spending cycle.