Equinix Says Its Smaller Data Centers Slip Under US Regulation Radar

Equinix is betting its smaller footprint keeps it out of Washington's crosshairs. The data center giant says its facilities typically run 30 to 60 megawatts, well under the roughly 100-megawatt threshold that U.S. proposals generally target. That gap, executives argue, could shield the company as regulators eye the breakneck buildout of AI infrastructure.

Cyrus Adaggra, Equinix's Asia-Pacific president, put it plainly on CNBC's Squawk Box Asia: because the company's sites usually sit below 100 megawatts, they tend not to get caught by legislation or regulation aimed at that level. He added that Equinix will keep investing wherever customers show up. The comments landed as U.S. midterm election results stoked fears that fresh restrictions could stall projects and inflate construction bills.

The exposure is real for the wider industry. According to a Wednesday report from BMI, a Fitch Solutions company, about 53% of projected growth in the U.S. hyperscaler development pipeline sits in states where newly elected governors could impose data center construction limits. BMI expects any fallout to show up more clearly from 2028, since most projects slated for 2027 are already locked in.

Equinix's own spending tells the demand story. Capital expenditures have climbed from about $2 billion a few years back to $7 billion, Adaggra said, with customer demand as the number one determinant of what gets built. Annualized gross bookings topped $500 million for the first time in the third quarter, up 35% from a year earlier, fueled by big enterprises including Fortune 500 names chasing hybrid and multi-cloud infrastructure. Equinix serves roughly 60% of the Fortune 500, he added.

Not everyone escapes the ripple effects. Russell Investments warned that development restrictions could lift costs across the AI infrastructure supply chain and that slower U.S. construction could dent demand for semiconductors and equipment, including from Asian suppliers. JPMorgan's Asia-Pacific banking CEO Sjoerd Leenart said in a Friday podcast that after the U.S., most data center investment and activity is expected to land in Asia, where hyperscalers are hunting for land, power and grid capacity.

Asia has its own headaches. Mirae Asset Securities said in a Thursday report that South Korea could become a key market for extra capacity, with operators holding power, land and long-term contracts best placed to grow. WTW flagged power availability, grid connectivity and equipment delays as core challenges in a Thursday report. Leenart also pointed to regulatory pushback in Thailand and Australia, where authorities paused some projects to weigh data center energy demand against other industries and consumers.