NASDAQ-listed Equinix, Inc. announced on Wednesday the signing of a joint venture (JV) agreement, in the form of a limited liability partnership with Singaporean sovereign wealth fund GIC and Canada Pension Plan Investment Board (CPP Investments) with the intent to raise over $15 billion in capital.
Driven by increasing artificial intelligence (AI) and cloud growth, the JV is intended to accelerate the Equinix xScale data center portfolio.
With the capital raised through the JV, Equinix expects the JV to purchase land to build new xScale facilities on multiple greater-than-100-megawatt (MW) campuses in the US, eventually adding more than 1.5 gigawatts of new capacity for hyperscale customers.
According to the statement, Equinix has a longstanding relationship with GIC, having previously partnered on xScale projects in Asia, the Americas and Europe. This agreement represents the first JV between Equinix and CPP Investments, which manages the assets of the Canada Pension Plan for more than 22 million contributors and beneficiaries.
Under the terms of the agreement, CPP Investments and GIC will each control a 37.5 percent equity interest in the joint venture, and Equinix will own a 25 percent equity interest. Each party has made equity commitments, and the joint venture also expects to take on debt to raise the total pool of investable capital to more than $15 billion over time.
Equinix’s existing hyperscale joint venture portfolio in Europe, Asia-Pacific and the Americas has a committed investment of over $8 billion, which is expected to result in greater than 725 MW of power capacity across more than 35 facilities at full buildout.
Platform Equinix ® features nearly 40 percent of the private on-ramps to the top global cloud service providers, which is more than any other provider.
xScale data centers serve the unique core workload deployment needs of the world’s largest cloud service providers, including hyperscalers, which are key players in the AI ecosystem.
The closing of the joint venture is subject to the receipt of required regulatory approvals, which are expected to be received in the fourth quarter of 2024.
Morgan Stanley & Co. LLC served as exclusive financial advisor to Equinix in connection with this transaction.
“As the world’s leading companies build out their infrastructure to support key workloads such as artificial intelligence, they require the combination of large-scale data center footprints optimized for AI training and interconnection nodes for the most efficient inferencing,” Adaire Fox-Martin, CEO and President, Equinix.
“We are proud to expand our years-long partnership with Equinix, addressing a massive and growing demand for digital infrastructure, driven by the rapid advancement of technology, including AI. GIC’s capital and scale, paired with Equinix’s operational expertise, has driven meaningful value across our investments together,” said Goh Chin Kiong, Chief Investment Officer, Real Estate at GIC.
“This investment will help meet the increasing demand for data centers driven by rapid technological advancements and marks a significant step forward in our broader data center strategy,” said Max Biagosch, Senior Managing Director, Global Head of Real Assets & Head of Europe for CPP Investments.