Online retail and cloud-services giant Amazon will acquire up to $8 billion worth of Generac backup power generators for its data centers, according to a U.S. Securities and Exchange Commission filing this week.

The long-term supply agreement begins with Generac delivering $2.4 billion in backup generators each of the next two years. The scope of the deal includes a warrant which allows Amazon to acquire nearly 1.7 million of Generac shares at almost $201 per share, the SEC document shows.

The move is seen as growing the scale of Generac’s data center business which the company has worked on expanding this year. The Amazon deal heated up trading for Generac shares to as high as $239 before settling back to about $205 later this week.

The data center supercomputing and AI sectors have accelerated their purchase of on-site power solutions at an unprecedented level. Generac rivals such as Cummins and Caterpillar have seen their order backlogs and revenue from transactions with data center companies nearly double in the past year.

In a recent interview with Microgrid Knowledge, Generac’s Fazil Shaikh, senior director of strategy and growth, discussed his company’s pivot from backup home generators to bigger transactions on the industrial scale and also embracing battery storage technologies in alliance with the fossil-fuel generators.

This pivot by Generac, Cummins and others comes as the traditional utility grid is facing resource adequacy and transmission constraints to deal with the wave of AI factories expected in the next decade.

“Across the entire grid, we need more flexibility and better utilization,” Generac’s Shaikh said. “When you look at our equipment—whether it’s natural gas generators, battery energy storage or multi-asset systems—we want to help C&I customers address their needs primarily around resiliency and affordability.

 “Many times, resiliency is solved with standby backup generators,” he added. “Increasingly, that means natural gas generators and, increasingly, natural gas generators participating in emergency demand response are part of the solutions set.”

Federal energy regulatory leaders and industry experts are saying that data center developers and the hyperscalers such as Amazon and Google must “bring their own generation” in coming projects. The Federal Energy Regulatory Commission has even tasked the nation’s grid system operators with developing new and streamlined plans for making those type of on-site prime power projects happen.

Google, Microsoft and Meta are all investing in long-term deals with both conventional power generation and future nuclear energy deals.

Amazon even contributed to a successful funding round for small modular reactor designer X-energy, which also has a deal with Dow to power its chemical manufacturing plant in south Texas.