Equinix formed a joint venture valued at more than $1 billion with GIC, Singapore’s sovereign wealth fund, to build and operate xScale data centers in Europe that target the world’s biggest cloud providers. GIC will own an 80% interest in the joint venture and Equinix will own the remaining 20% interest.

Equinix started talking about its Hyperscale Infrastructure Team, or HIT, in 2018, and working to find a partner to form a venture to finance these dedicated hyperscale facilities. Now that it announced that partner — GIC — the interconnection giant is also changing the name of the cloud-scale data centers. The new name is xScale.

Two of these xScale data centers are already up and running with hyperscale customers. One is in Paris and the other in London. Both facilities will be transferred to the joint venture, which will own and develop four more in the next couple of years: two in Frankfurt, one in Amsterdam, and another in London.

Of these remaining four, two will likely open in 2020, and the other two in 2021, said Eric Schwartz, chief strategy and development officer at Equinix.

All of the major cloud providers including Amazon Web Services (AWS), Microsoft Azure, Google Cloud, Alibaba Cloud, and Oracle Cloud Infrastructure already partner with Equinix. The company claims its SDN-based platform offers the most access point to these top cloud providers. In addition to access points, these hyperscale companies are also Equinix customers and bring in more $500 million annually in revenue.

But as more companies move their workloads to the cloud, hyperscalers need to add more deployments to their existing access points across Equinix’s facilities. They need more floor space with room to grow. And they also have specialized requirements such as uptime and redundancy; high power density and full UPS backup systems; and massive amounts of networking capacity.

In addition to offering its SDN-based connectivity platform (Equinix Cloud Exchange Fabric) and its new Network Edge virtual network functions (VNFs), the xScale facilities will be designed to meet the technical and operational requirements of hyperscale companies, Schwartz said. “We’ve done everything we could to look at how we could optimize the xScale design for these hyperscale customers for large deployments, and that’s very different than how we build a typical Equinix facility,” he said.

While Equinix’s traditional IBX data centers usually house between 50 and 100 customers, the new xScale facilities “are designed for two, maybe three, or maybe four customers at most,” he said. The six locations will have a combined power capacity of about 155 megawatts, “and in addition to the higher power density, each customer get their own room or multiple rooms," Schwartz explained

Cloud customers also require a different approach to security, longer contracts, more customization, and they don’t need as many shared services, for example, Schwartz added.

Equinix plans to build these hyperscale data centers close to its traditional ones “whenever possible so the advantage to the customer is we can offer excellent connectivity between our existing sites and the xScale facilities,” Schwartz said. For example, the Paris xScale facility that’s already online “is less than 20 feet away from Paris 4,” he explained. “So the connectivity is literally running cable between the skybridge” that links the two buildings.

This new type of data center also requires major capital. Equinix plans to invest about $2 billion in new and existing IBX capacity, including its service platforms, this year. The joint venture, however, creates a separate investment vehicle to fund the six xScale data centers. It has received financing commitments for about $960 million of secured credit to date.

One of the reasons Equinix partnered with GIC is because “they’ve got the capital resources to do more,” and go beyond the initial six xScale data centers in Europe, Schwartz said. This includes building more hyperscale facilities in Asia, Europe, and the U.S. “We’ve got opportunities in the pipeline in all three regions,” he said, adding that the Infomart Dallas facility that Equinix acquired last year “has a lot of opportunity for expansion around it.”

Equinix is also looking at forming additional joint ventures with GIC and other firms. “Those efforts are already in the pipelines,” Schwartz said.