With $850M Backing, Data Center Startup Stack Infrastructure Expands Chicago Footprint

Targeting the red-hot hyperscale data center space, Stack Infrastructure unveiled plans today to build a new 20-megawatt center in Chicago.

The newly formed hyperscale-focused data center startup Stack Infrastructure unveiled plans on Thursday to open a new 20-megawatt facility in Chicago, less than a month after the state passed a sweeping data center tax exemption bill.

The Denver-based wholesale colocation provider launched out of stealth in January formed by investor IPI Data Center Partners after it combined Infomart Data Centers with assets from T5 Data Centers.

Stack, which now operates eight data centers across the U.S., generated a whopping $850 million of capital financing this year through securitized notes from investors with plans to build more data centers targeting hyperscale data center operators such as Amazon, Apple, Facebook, Google and Microsoft, which are investing in data centers at a record pace.

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On Thursday, Stack announced that it will build a new multi-story, 20-megawatt data center adjacent to its existing Chicago data center campus, bringing the company’s total capacity in Chicago to 33 megawatts.

“Chicago is one of a number of important and growing markets for our clients, and as a result, it is a key market for Stack,” said Stack CEO Brian Cox in a statement. “We’re committed to investing here so that we can continue to support our clients and stay ahead of their needs.”

The company did not reveal when it expects to open the new facility.

Stack’s news comes not long after Illinois lawmakers passed a data center bill that exempts owners and operators from paying sale tax on the IT inside the facilities. The data center tax incentive exempts qualifying data centers from state and local sales tax on equipment inside the facilities – from servers and storage to liquid cooling solutions -- for the next 10 years.

To qualify for the tax breaks, data center operators and their tenants need to invest a minimum of $250 million in expenses within Illinois over a five-year period. New data centers are also required to meet green building standards aimed at making the facilities more sustainable and environmentally friendly.

Also boding well for Stack is the red-hot hyperscale data market that spent a record-setting $120 billion in capex last year, led by large cloud and internet services firms including Amazon, Alibaba, Apple, Facebook, Google, IBM, Microsoft, NTT and Tencent.

Stack’s main offerings includes Hyper Stack for hyperscale campuses and build-to-suit data centers; Ready Stack for wholesale colocation and private data suites; and Power Stack for powered shell options. Stack owns approximately 1.5 million square-feet of aggregate data center space across the country with facilities in Atlanta, Chicago, Dallas, Northern Virginia, Portland and San Jose.

Founded in 2016, IPI Data Center Partners is a joint venture between wealth management firm Iconiq Capital and real estate investor Iron Point Partners.