Equinix is working on one of its first xScale data centers in the United States
Trillions of dollars are pouring into the data center market, and the sites can’t be built fast enough. A gigawatt of capacity here, a gigawatt there. Every day, it seems like the promised scale of new sites gets bigger and bigger — in an industry tendency toward what Chip Newcom, senior director of investor relations at Equinix, jokingly calls the “bragawatts.”
Equinix has been in the data center business for almost three decades, and in the hyperscale DC business for nearly eight years, focused on markets abroad with its xScale data center design. After lining up a joint venture in late 2024 with $15 billion in funding, the California-based company is expanding its xScale hyperscale data center business to the U.S., with a new site in the works in Hampton, Georgia, near Atlanta.
Tiffany Osias is the managing director of Equinix’s xScale business. Speaking at this week’s KeyBanc Technology Leadership Forum, she discussed the latest progress on the new xScale site and Equinix’s strategy in pursuing “generational” assets amid a competitive landscape that is already being compared to the dot-com boom (and bust).
The Hampton, GA site of “several hundred acres” is currently being leveled in order to prep for construction, Osias said. “We have bulldozers pushing dirt every day and getting it pad- ready,” she said, and Equinix is working with a local power company on supplying the site. The company is “actively looking at other campuses as well,” according to Osias.
“The ambition is to have a handful of multi-hundred-megawatt campuses across the Americas region,” she added.
Equinix’s xScale versus retail business
Osias was in Equinix’s retail data center business before taking up the xScale effort. The difference between Equinix’s retail data center business and xScale is, as the name implies, one of scale: The retail business means many more customers in a data center, with smaller individual footprints. (Equinix has about 10,000 customers across its portfolio.) For xScale sites, there will be fewer customers with larger footprints: One company might lease an entire site or campus.
The data centers built by xScale will also be larger, denser deployments than the ones that Equinix has built in the past. Osias said that customers will be buying at least 30 MW of deployment capacity, compared to customers in retail who buy in much smaller
increments of as little as 5-15 MW.
In Equinix’s retail business, a single data center building might take several years to fill; with xScale, a single customer might fill an entire building or multi-phase campus, meaning the company will need to more rapidly move onto the next development project to meet demand.
And what does that demand look like? Newcom said that all of the capacity the company is building out could theoretically be offered to one hyperscaler — and not satisfy them for a single year. “That’s how much demand there is out there in the market,” he said.
Siting, latency and power
With that context, Osias said that the company is looking at the opportunities available and will be “highly focused” in how it pursues them. She also made it clear that after nearly 30 years in business, Equinix is thinking about “generational” assets rather than chasing any single trend.
“We’re not thinking about meeting one trend in a moment in time, we’re thinking about durability and creating a platform that can capture multiple trends over time,” Osias said. That means data centers with the flexibility to be able to handle AI training, AI inference, cloud or enterprise workloads — and choosing sites that are close enough to major metro areas to keep latency reasonable, rather than pushing far out into geographically remote areas where land or power might be more readily available.
“If you’re going to capture all of those workloads, you need to think about latency as well, so those top metros are still important to us,” she explained. “It doesn’t mean we have to be in downtown Atlanta — like you’re seeing play out here with this [Hampton, GA] campus, we’re about 40 miles away. But we’re still staying very close to those metro centers, because the interconnection back into Equinix is also really important for the success of xScale.”
Asked about how the company is dealing with the power needs of data centers, Osias responded: “Power is certainly a challenge right now,” and added that in jurisdictions that have power availability challenges, Equinix takes “an all-of-the-above kind of strategy to power.” She said that Equinix will take what it can from the local grid and will also look at on-site generation capabilities and fuel cells in some locations, to bridge the gap between what’s needed and what the local grid can provide.
Tuning out the ‘braggwatts’
All of that complexity — capital intensity, long timelines, highly variable component supply chains — make the data center business a tough one, that is now under high pressure from red-hot demand.
“Anyone who has been in this space for awhile knows building and constructing and operating a data center is hard business. It’s a really hard thing to do,” Osias said. “And we’ve got a long track record of being able to do this. Other folks might be entering it for one specific purpose — we are in the data center space for a multitude of purposes.”
It’s easy to talk about building gigawatts of data center capacity — those “bragawatts” — and not so easy, or fast, to actually do it. Especially when people start running the numbers and realize how much capital will be tied up, when it takes about an estimated $10-$12 million to build out a megawatt of data center capacity.
“There is an element of bragawatts right now, in terms of everyone saying, ‘Well, I’m going to build a gigawatt, and I’m going to build five gigawatts.’ The simple fact is, is that is you think about a gigawatt — again, if you’re building at $10 million a megawatt — that’s $10 billion of capital that you have to put to work,” Newcom said. “And not only do you have to have a lot of capital to build data centers, but you also then have to have power, you have to have all of the mechanical and electrical to do that.”
Some hyperscalers (most recently, Meta) have already started to sell off some data center projects in the works or bring in other partners for capital, he noted.
Osias said another important aspect of Equinix’s track record in building data centers is its history and working relationships with suppliers of servers, cooling and other components, to support both internal design flexibility and stay abreast of new technologies and timelines, as data center deployments get more dense and power-hungry.
Siting and power are important considerations, but components are another source of delays; having a good sense of timelines, and having hundreds of millions of dollars of inventory on its books already, means not having to wait for generators or other specific hardware, and being able to choose to deploy at sites across its retail or xScale business that will bring the most efficient return on capital, Newcom added.
Building generational assets also means being willing to wait. Equinix is accustomed to dealing with the long timelines that come with getting power to new sites. Osias said that typically at a site, power isn’t available upfront, and that depending on the time-horizon that Equinix has in mind, power arrival timeline of three, five or even eight years out are “perfectly acceptable” across its “vast land bank” of owned properties for development.
Equinix’s move to bring its xScale business to the U.S. reflects both the surging demand for hyperscale capacity and the challenges of delivering it — which the company is confident that it can handle by leaning on its experience, supplier relationships and capital resources to navigate a newly crowded competitive landscape, and tuning out the “bragawatts” in favor of execution.
