Equinix has secured $15 billion in funding to enhance its xScale data centers, focusing on U.S. investments to support the burgeoning demand for artificial intelligence (AI).
Based in Redwood City, California, Equinix has established a global network of data centers that serve as a cornerstone of the internet. I once visited one of their facilities and was stunned by its size, which accommodates numerous servers, extensive cabling, and advanced cooling systems. Now, these data centers are set to expand significantly.
In an interview, Krupal Raval, Managing Director of xScale Data Centers at Equinix, announced the completion of a joint venture agreement that raised over $15 billion in capital, with the final structure of equity and debt yet to be finalized. This joint venture, subject to closure in the fourth quarter, includes partners like GIC and the Canada Pension Plan Investment Board (CPP Investments).
Raval emphasized that the $15 billion investment reflects not only the vast potential of upcoming projects but also the importance of strong partnerships. "This investment is a testament to the health of our collaborations. We’re thrilled that GIC is significantly increasing its commitment, and now CPP joins us to further invest in North America."
The joint venture aims to scale Equinix’s xScale data centers in response to increasing AI and cloud computing demands. This initiative is expected to nearly triple the investment capital of the Equinix xScale program, which has already amassed $8 billion in financial commitments.
Raval highlighted that the new funding will primarily support the development of data centers in the U.S. to meet AI-related demands. "We believe we are only in the early stages of AI's impact, which could represent one of the most significant technological shifts in generations."
With the capital raised, the joint venture plans to acquire land for new state-of-the-art xScale facilities across multiple campuses in the U.S., adding over 1.5 gigawatts of capacity for hyperscale customers.
Equinix has a long-standing relationship with GIC, having previously collaborated on xScale initiatives in Asia, the Americas, and Europe. The current agreement marks the first partnership between Equinix and CPP Investments, which manages the assets of the Canada Pension Plan for over 22 million contributors and beneficiaries.
Under the joint venture terms, both GIC and CPP Investments will hold a 37.5% equity interest, while Equinix will retain a 25% share. The venture plans to incorporate debt, raising the total investment capital to over $15 billion.
Equinix’s existing hyperscale joint venture portfolio across Europe, Asia-Pacific, and the Americas is valued at over $8 billion, anticipated to generate more than 725 megawatts of power capacity in over 35 facilities once fully developed.
With nearly 40% of private on-ramps connecting to the largest global cloud service providers, Equinix creates an ecosystem for over 10,000 enterprises, enhancing their ability to connect and engage directly with leading cloud operators.
xScale data centers are designed to meet the core workload requirements of major cloud service providers, enabling efficient growth within Equinix’s International Business Exchange (IBX) infrastructure spanning 72 global metros.
Equinix is committed to sustainable digital infrastructure, engaging suppliers and partners to uphold responsibility throughout the supply chain. The company prioritizes energy efficiency in its data center designs, with all xScale facilities set to achieve LEED certification.
"We maintain industry-leading sustainability standards," Raval stated. "Our commitment to being 100% powered by clean energy by 2030 reflects our dedication to environmental responsibility and innovation."
The joint venture is subject to regulatory approvals, anticipated by the fourth quarter of 2024. Morgan Stanley acted as the exclusive financial advisor for Equinix in this transaction.
Adaire Fox-Martin, CEO of Equinix, commented, "As major corporations build infrastructure for AI workloads, they require extensive data center capacity optimized for AI training and interconnection efficiency. Our offerings are uniquely positioned to meet this need, unlocking AI’s immense potential."
Goh Chin Kiong, GIC’s Chief Investment Officer for Real Estate, expressed pride in the expanded partnership with Equinix, highlighting the growing demand for digital infrastructure fueled by technological advancements, including AI.
Max Biagosch, Senior Managing Director at CPP Investments, noted, "Our investment in data centers aligns with our strategy to meet growing technological demands and deliver strong returns for the CPP Fund."
Raval added that Equinix traditionally invests billions annually, indicating the company’s capability for further expansion. The total commitment to the xScale initiative now stands at approximately $23 billion, with a significant power requirement of over 20 gigawatts for these data centers.
When asked about the trend of countries pursuing sovereignty in AI and data infrastructure, Raval affirmed its relevance, stating, "We see AI growth worldwide, but this announcement specifically targets the U.S. as the largest growth market for AI."
Equinix plans to create new job opportunities related to this project, including construction roles. The company has already secured its first xScale data center site in the Atlanta area, which will support 240 megawatts of power.
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