Data center infrastructure company Equinix, investor GIC and Canada Pension Plan Investment Board (CPP Investments) are forming a joint venture (JV) agreement to invest $15 billion, together with their partners, to support Equinix's data center buildouts.
The funding will be used toward expanding Equinix's xScale data centers, which support hyperscalers and "large scale requirements" for cloud workloads, explained Krupal Raval, managing director of xScale for Equinix. The JV will nearly triple the investment capital of the xScale program.
Supporting AI workloads is another top priority for the xScale buildouts, explained Raval. AI-capable data centers require more compute capacity and will need to be able to support both the AI model training and inference.
"The compute that's required and the workloads that are going to be put into these AI data center campuses will require huge amounts of data center capacity to be built," said Raval. "The scale is just a different ballgame."
These data centers will likely require liquid cooling to manage the heat-intensive AI chips such as GPUs, he added.
Equinix launched the xScale program five years ago under a separate investment plan from its other data centers, and currently has an $8 billion commitment from investors, largely from GIC. At the completed buildout, the $8 billion investment is expected to deliver over 725 MW of power capacity across more than 35 facilities in Europe, Asia-Pacific and the Americas.
The latest $15 billion investment will be focused entirely on xScale buildouts in the US. Equinix plans to use the JV to purchase land and build new xScale facilities on multiple greater-than-100-megawatt (MW) campuses. The buildouts will ultimately add over 1.5 gigawatts of new capacity for hyperscale customers.
Raval explained that sustainability will be an important focus for the xScale data centers, which will be LEED certified or certified in the regional equivalent. Equinix has a goal of achieving 100% renewable energy use by 2030 and maintained 96% renewable energy coverage in its portfolio for 2023.
Equinix, which has over 10,000 customers, has also partnered with GIC on xScale projects in Asia, the Americas and Europe, but this is the first JV between Equinix and CPP Investments. Equinix deliberately chose investors that aren't private equity firms to ensure a long-term investment partnership, said Raval. GIC is "the government of Singapore's sovereign wealth vehicle," said Raval – a private investment company owned by the Government of Singapore. CPP Investments is a Crown Corporation and global investment management organization that operates independently of government.
Under the terms of the agreement, CPP Investments and GIC will each control a 37.5% equity interest in the joint venture, and Equinix will own a 25% equity interest. Subject to required regulatory approvals, the JV is expected to close in Q4 of this year. Morgan Stanley & Co. LLC is acting as the exclusive financial advisor to Equinix for this transaction.
