Subject to Closing Conditions: Equinix's Release on a Joint Venture for Hyperscale Data Centers

Equinix, Inc. announced on October 1, 2024, in a release on its own site, "the signing of a joint venture (JV) agreement, subject to closing conditions, in the form of a limited liability partnership with" two partners that it names. Its expected size is stated in that sentence as an intent, "with the intent to raise over US$15 billion in capital together with its partners." Parts of the release follow, not the whole. The agreement itself is not reported here, and neither partner is named.

Who Owns What

Under the terms of the agreement, the two partners will each control a 37.5% equity interest in the joint venture, and Equinix will own a 25% 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 US$15 billion over time."

Equinix will own the smallest of the three equity interests.

Campuses for Hyperscale Customers

The release says the venture is intended to accelerate the company's xScale data center portfolio, "Driven by increasing artificial intelligence (AI) and cloud growth." With that capital, Equinix expects the venture to purchase land to build new facilities on multiple campuses of more than 100 MW in the United States, "eventually adding more than 1.5 gigawatts of new capacity for hyperscale customers." The release gives no date for that capacity.

Campuses of that size each need a connection to the grid, or power of their own, before any of that capacity is real. The release names the capacity and, among its risks, the cost of procuring power, but not where that power is to come from.

Closing and Risks

"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." The release's note on forward-looking statements says "Actual results may differ materially from expectations discussed in such forward-looking statements." Among the factors it lists are "any inability of Equinix, the partners or the joint venture to obtain financing as needed" and "increased costs to procure power and the general volatility in the global energy market."