Equinix has set up a new joint venture (JV) to raise $15 billion to fund the growth of its xScale hyperscale data center portfolio.

The colo provider has set up the JV with GIC, Singapore’s sovereign wealth fund, and the Canada Pension Plan.

It aims to raise more than $15 billion to finance the build-out of xScale, a product that enables hyperscale providers to add core deployments to their existing footprints at Equinix International Business Exchange (IBX) data centers.

Several 100MW xScale data centers in the pipeline

Equinix says the JV will aim to purchase land for several 100MW plus data center campuses in the US, eventually adding more than 1.5GW of new capacity for Equinix’s hyperscale customers.

Adaire Fox-Martin, CEO and president of Equinix, said: "As the world's leading companies build out their infrastructure to support key workloads such as artificial intelligence (AI), they require the combination of large-scale data center footprints optimized for AI training and interconnection nodes for the most efficient inferencing. Our xScale and IBX offerings are uniquely positioned to address this business need, enabling companies to realize the powerful potential of AI."

The JV will see CPP Investments and GIC each control a 37.5 percent equity interest in the joint venture, with Equinix owning a 25 percent stake. Each party has made equity commitments, and it is expected the JV will take on debt to raise the total pool of investable capital to more than $15 billion, though Equinix declined to put a timescale on this.

xScale addressing "massive and growing demand"

Goh Chin Kiong, chief investment officer for real estate at GIC, said the JV will address “a massive and growing demand for digital infrastructure, driven by the rapid advancement of technology, including AI.”

Kiong said: “GIC's capital and scale, paired with Equinix's operational expertise, has driven meaningful value across our investments together. Through this joint venture, we look forward to providing the funding needed to develop state-of-the-art digital infrastructure across the U.S. alongside our like-minded partner, CPP Investments."

Equinix first partnered with GIC in October 2019 to develop hyperscale facilities under the xScale label. Prior to today’s announcement, the pair had jointly invested more than $7.5 billion in xScale-branded data centers, which have opened in countries including the UK, Japan, France, Brazil, and South Korea.

In April, Equinix announced it had formed a JV worth $600 million with PGIM Investment to open an xScale data center in Silicon Valley. This is set to offer 28MW of IT capacity.

CPP has a number of data center-related investments, and recently teamed up with Blackstone to purchase APAC-focused operator AirTrunk in a record-breaking $16.1 billion deal.

Max Biagosch, senior managing director, global head of real assets and head of Europe for CPP Investments, said: "CPP Investments has invested in data centers for several years and we have developed strong expertise in this space.

“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.”