Singapore’s GIC, Equinix To Invest $3.9 Billion In Hyperscale Data Centers Amid Cloud Computing Boom

Singapore’s sovereign wealth fund GIC and Nasdaq-listed Equinix agreed to invest $3.9 billion to build a portfolio of hyperscale data centers amid rising demand from cloud computing services companies. 

Through this latest joint venture with GIC, Silicon Valley-based Equinix will expand xScale—Equinix’s hyperscale data center portfolio that caters to some of the world’s biggest cloud services providers—to 32 facilities that will be valued at $6.9 billion when completed, Equinix said in a statement.

The projects in this joint venture are expected to close over the course of 2021, pending regulatory approvals, Equinix said. GIC will own 80% equity interest in these future projects, while Equinix retains the remaining 20%.

“The joint venture arrangement of xScale enables these large deployments to be structured in an off-balance sheet model that aims to preserve capital for investment in our traditional retail data centre and digital infrastructure business and maintain our strategic and financial flexibility,” said Equinix chief executive Charles Meyers.

This is the third collaboration between GIC and Equinix since 2019 when the two companies announced a $1 billion venture to build hyperscale data centers across Europe. Last year, the partners announced a separate deal to invest more than $1 billion to build hyperscale server facilities in Japan.

Demand for data centers has been growing as consumers and businesses increasingly turn to remote working, video streaming and online gaming as cities around the world went into lockdowns last year to curb the spread of the Covid-19 pandemic.

GIC and Equinix plan to build six hyperscale server facilities in Japan, 19 across Europe, four in Latin America and three more in locations that have yet to be identified. The facilities are designed to meet the requirements of the world’s largest cloud computing companies including Alibaba, Amazon and Google, which are already using Equinix’s global portfolio of traditional 220 data centers.

“We are investing globally to serve the growing demands of hyperscale companies and to provide cloud service infrastructure everywhere it is needed,” xScale managing director Krupal Raval and Equinix chief strategy and development officer Eric Schwartz said in a blog post.

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