Data center provider Equinix ‘selling an AI pipe dream’ [Video]

Hindenburg Research on Wednesday took aim at Equinix, an $80 billion data center provider, and accused the company’s management of selling shareholders an “AI pipe dream” while manipulating key metrics to boost the appearance of profitability.

Hindenburg said it had taken a short position against Equinix, meaning it was betting that shares of the real estate investment trust, or REIT, would fall.

Equinix shares plunged as much as 7% in premarket trading before paring back losses at Wednesday’s open to around 3%.

The company’s customers include the cloud divisions of Amazon, Google and Microsoft, according to Equinix’s website.

“We are investigating the claims and we will respond in due course,” an Equinix spokesperson told CNBC.

The short seller said that Equinix reported maintenance expenses — a major cost center for REITs — as spending on growth, making it appear “that the company’s cost to maintain its revenue base is lower than it actually is.”

Former …