The Canada Pension Plan’s latest investment might not be as sexy as motorcycle racing, but it looks like sensible business.
What happened: The Canada Pension Plan Investment Board (CPPIB) signed on to a joint venture with data centre giant Equinix and Singapore’s sovereign wealth fund that aims to raise US$15 billion to build more data centres in the U.S. CPPIB will own 37.5% of the venture.
- Equinix is the largest real estate investment trust focused on data centres and serves big-shot customers, including Adobe, IBM, Microsoft, and Meta.
Why it matters: Thanks to the AI boom and its insatiable appetite for storage capacity, demand for data centres has reached a fever pitch. The U.S. data centre market has doubled since 2020, per real estate firm JLL, with vacancy rates at an all-time low of 3%.
- Despite the fact most retirees probably don’t know what a data centre is, these IT storage facilities have a growing impact on their pensions. CPPIB has made several data centre investments, taking a 12% stake in operator AirTrunk just last month.
Yes, but: The drive to build more and more data centres faces a sustainability issue. Goldman Sachs projects demand for data centre power will grow 160% by 2030, guzzling up to 4% of global energy. Maybe CPPIB should invest in nuclear power, too.—QH