3M Strikes Amazon Data-Center Supply Deal With Warrants Tied to $6 Billion in Purchases

3M (MMM) announced an agreement to supply Amazon (AMZN) with products for its data centers, including Expanded Beam Optical connectivity offerings, in a deal that grants Amazon warrants for about 3 million MMM shares over seven years. About 85% of the warrants reportedly vest only after Amazon's cumulative data-center purchases reach $6 billion, effectively committing Amazon to roughly $860 million in annual purchases. UBS estimates 3M's annual optical connectivity and data-center revenue could climb from $40 million to more than $1 billion by 2028. At a 65% gross margin, the contract could add about $500 million to annual operating income, versus roughly $4.6 billion in 2025. CEO Bill Brown expects revenue from the deal to begin rising by the end of next year. Microsoft agreed in July to use 3M's optical connectivity products, and Brown reportedly pegs the EBO addressable market at about $2 billion by 2028.