Meta, BlackRock announce $14 billion AI data center project in Texas

Meta Platforms and BlackRock have announced a joint venture to develop and operate a massive $14 billion AI data center campus in El Paso, Texas. The project, already under construction and expected to be operational by 2028, will provide 1 gigawatt of compute capacity vital for Meta's AI technologies and core business.

Under the agreement, BlackRock-managed funds will hold an 80% ownership stake in the venture, with Meta retaining the remaining 20%. BlackRock's investment will be partly financed through $12.5 billion in debt, while Meta contributes land and in-progress construction assets valued at $2.3 billion, alongside a $1 billion distribution. This financing structure allows Meta to secure computing capacity without direct ownership, addressing investor concerns over the escalating costs and returns of AI infrastructure investments.

The initiative underscores the unprecedented scale of investment required for AI infrastructure, prompting tech giants to seek substantial external capital and debt financing. Despite the significant investment, investors like Matt Britzman of Hargreaves Lansdown continue to scrutinize the potential cash flow, operating costs, and investment returns, especially given Meta's lack of a large cloud business for selling spare capacity. The article also notes Meta's broader plan to invest $600 billion in AI infrastructure by 2028 across the U.S., aiming for personal superintelligence, and mentions general protests against AI data center expansion in 42 states. Financial advisors for Meta in this transaction included Morgan Stanley & Co and J.P. Morgan Securities.