Industrial conglomerate 3M is expanding its commercial partnership with Amazon as technology companies increase investments in data centre infrastructure to support artificial intelligence (AI) and cloud computing. Following the announcement, 3M shares rose more than 5% in extended trading on Monday.
As part of the agreement, 3M has issued a warrant to a wholly owned Amazon subsidiary, giving it the right to purchase up to 3.16 million 3M shares over the next 7 years at $164.89 per share. The shares covered by the warrant are valued at more than $521 million.
Around 85% of the warrant shares will vest as Amazon purchases optical connectivity products and other data centre solutions from 3M. This portion will become fully vested once Amazon’s total purchases reach $6 billion.
The remaining 15% of the shares will vest after certain milestone-based conditions are met.
The expanded partnership comes as major technology companies increase spending on data centre infrastructure to meet growing demand for AI computing and cloud services. Optical connectivity technologies are becoming increasingly important in supporting the high-speed data transmission required by AI data centres.
In July, Microsoft became the first hyperscaler to adopt 3M’s Expanded Beam Optics technology in AI data centres, marking another step in the company’s efforts to expand its presence in the growing data centre market.
The latest agreement strengthens 3M’s commercial ties with Amazon while linking a significant portion of the warrant’s vesting to purchases of its data centre products.
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