Equinix Says Smaller Data Centers May Be Less Exposed to U.S. Restrictions

Equinix says its data centers may be less exposed to potential U.S. construction restrictions because its facilities are typically 30 to 60 megawatts, below the threshold U.S. proposals typically target.

Equinix facilities typically range from 30 to 60 megawatts. Cyrus Adaggra, Equinix's Asia-Pacific president, said U.S. proposals typically target projects at a roughly 100-megawatt threshold. The company's usual site size therefore sits below the scale described in those proposals.

The remarks come as U.S. regulators scrutinize rapid data-center development connected with artificial intelligence infrastructure. Midterm election results have heightened concerns that possible limits could delay projects or increase construction costs.

Equinix's capital spending has risen to $7 billion from about $2 billion a few years ago, Adaggra said. He described customer demand as the main driver of the company's building and spending decisions, and said Equinix invests in markets where customers need capacity.

In the third quarter, Equinix's annualized gross bookings topped $500 million, a 35% increase from a year earlier. Adaggra linked the growth to large businesses seeking hybrid and multicloud systems, network connections and access to digital infrastructure. Customer demand also shapes where and how Equinix builds, he said.

Equinix serves about 60% of Fortune 500 companies, Adaggra said. Its customers include large enterprises investing in hybrid and multicloud infrastructure, network connectivity and digital infrastructure access.

Asia is also drawing attention as a data-center investment destination. Sjoerd Leenart, CEO of JPMorgan's banking business in Asia Pacific, expects the region to attract the most data-center investment and activity after the United States. He said global hyperscalers are seeking Asian markets with enough land, electricity and grid capacity.

Those markets face constraints, including power availability, grid connections and equipment delays. Leenart also pointed to pauses in some projects in Thailand and Australia as authorities assess how data-center energy demand could affect other industries and consumers.