(Reuters) – Data center company Equinix (NASDAQ:) is forming a joint venture with Singaporean sovereign wealth fund GIC and Canada Pension Plan Investment Board with the aim of raising more than $15 billion in capital, the company said on Tuesday.
Equinix and its partners will use the capital to expand the U.S. footprint of “hyperscale” data centers, the largest in the industry, which provide massive network capacity and typically consume as much power as a major city.
WHY IT’S IMPORTANT
The announcement comes at a time when companies across industries are rushing to deploy artificial intelligence technologies in their operations, fueling demand for the immense computing power and storage capacity of data centers.
Large data centers, like the ones Equinix plans to scale, are typically used by hyperscalers, including the world’s largest technology companies such as Amazon (NASDAQ:), Microsoft (NASDAQ:) and Alphabet’s Google (NASDAQ:).
The joint venture will nearly triple the investment in Equinix’s hyperscale center program, purchase land for new facilities and add more than 1.5 gigawatts of new capacity over time.
BY THE NUMBERS
Canada Pension Plan Investment Board, or CPP Investments, and GIC will each control a 37.5% equity stake in the JV, while Equinix will own 25%, Equinix said.
The joint venture will also take on debt to ultimately bring its total investable capital to more than $15 billion.
THE CONTEXT
Equinix has seen strong growth in recent quarters, driven by demand for its data centers, with the company raising its annual core earnings guidance in August.
The company is also eyeing expansion in the high-growth region of Southeast Asia, acquiring three data centers in the Philippines earlier this year.
The company already has a partnership with Singapore’s GIC for large-scale projects in various regions.
