Equinix Seals Nvidia Deal, Eyes Multitrillion-Dollar AI Boom

Equinix has established itself as a major player in the burgeoning AI data center market. The company, which provides colocation facilities for over 10,500 customers, is well-positioned to capitalize on the multitrillion-dollar boom in AI infrastructure spending.

According to Goldman Sachs Research, hyperscalers are expected to spend over $5 trillion by 2030 on AI data centers. Equinix has secured a deal with Nvidia that will enable customers to run their AI models on the open-source cloud platform Together AI.

The partnership, called Equinix Inference Exchange, will be available in the first quarter of 2027 and will allow customers to connect to various clouds and providers, run inference on open-source models, and optimize their tokenomics. This is a key advantage for Equinix, as its urban locations are optimized for high-speed communication between servers and end users.

Equinix's stock price has surged 33% this year, beating all megacap tech stocks and lifting the company's market cap to $100 billion. The company's diversified business model, which includes a huge amount of general-purpose compute and services across a wide client base, has insulated it from the risks associated with AI bubbles.

Jim Chanos, a short seller who has bet against Equinix and Digital Realty, described the legacy data center companies as 'not great businesses' due to their low return on capital and high capital intensity. However, Galabov, a longtime data center analyst, disagrees, saying that Equinix is 'super diversified' and not exposed to AI bubble risks.