US generator manufacturer Generac has signed a long-term deal with Amazon to supply backup generators for the hyperscaler's data center portfolio.

Reuters reports that initial deliveries of the gen sets will total approximately $2.4 billion over the next two years. In the longer term, the company said it expects to provide up to $8bn worth of generators to Amazon.

The deal was disclosed in a filing with the US Securities and Exchange Commission and includes a provision for Amazon to acquire up to nearly 1.7 million shares of Generac stock for approximately $200 per share. Amazon will have the option to purchase 300,000 shares immediately, with the remaining shares available as Generac receives payments and supplies backup power generators under the terms of the deal.

Commenting on the agreement, Generac CEO Aaron Jagdfeld said the deal establishes Generac as a “long-term partner for the supply of industrial backup generators to Amazon.”

“It provides visibility to our multi-year growth expectations and our ongoing investments in vertically integrated large megawatt generator manufacturing capacity,” Jagdfeld added. “This is a significant milestone for Generac and positions us to capture this generational growth opportunity.”

Generac has significantly expanded production in response to strong demand from the data center market. In June, the firm signed a global supply agreement with an undisclosed hyperscale data center firm to supply backup generation infrastructure. It is unclear whether this is the Amazon deal. DCD has reached out for further information.

Founded in 1959, NYSE-listed Generac provides power generation equipment, energy storage systems, energy management devices, and solutions serving the residential, commercial, data center, telecom, rental, and industrial markets. The company has manufacturing plants in Beaver Dam and Sussex, Wisconsin.

Last year, the firm launched a new range of five generators, ranging from 2.25MW to 3.25MW, targeting the data center space. The company said it can offer lead times of 50-60 weeks for fully packaged generators.

Earlier this year, the company acquired Enercon, a maker of generator enclosures and switchgear, to expand its data center capabilities.