Meta, BlackRock partners for data center project worth $14 billion
Meta Platforms and BlackRock have partnered on a $14 billion data center campus in El Paso, Texas, with BlackRock holding an 80% stake and Meta retaining 20%. The project is currently under construction and is designed to provide 1 gigawatt of computing capacity to support Meta's AI systems and core business operations, with operations expected to begin in 2028. This partnership allows Meta to accelerate its AI infrastructure buildout amid increased capital spending projections.
Meta Platforms and BlackRock, the world's largest asset manager, have formed a joint venture to develop and operate a substantial $14 billion data center campus in El Paso, Texas. This partnership highlights a growing trend of Wall Street firms investing heavily in AI infrastructure.
The agreement, announced on Tuesday, stipulates that funds managed by BlackRock will hold an 80% equity stake, with Meta retaining the remaining 20%. BlackRock's investment will include $12.3 billion in debt financing, while Meta will contribute approximately $2.3 billion in land and construction assets, alongside receiving a $1 billion distribution to align ownership. Meta will lease the entire campus under an initial four-year agreement.
The El Paso facility, already under construction and anticipated to commence operations in 2028, is designed to deliver 1 gigawatt of computing capacity, crucial for supporting Meta's expanding AI systems and core business operations. Meta CEO Mark Zuckerberg stated that this joint venture enables the company to scale its data center developments more rapidly. This project is one of 28 data centers Meta is currently operating or constructing across the United States.
The announcement comes as Meta has increased its projected annual capital spending to between $125 billion and $145 billion, largely driven by AI infrastructure and component costs. Despite investor concerns about the financial implications, as noted by Matt Britzman, senior equity analyst at Hargreaves Lansdown, Meta plans to invest over $600 billion in data center construction by 2028. The company is also developing other gigawatt-scale facilities, including a 5-gigawatt project in Louisiana, and is exploring leasing computing power to companies like Anthropic.