Meta Platforms and the world’s largest asset manager BlackRock on Tuesday announced a venture to develop and operate a data centre campus in El Paso, Texas, a project that would cost about US$14 billion in development. The race to build out AI infrastructure has prompted tech giants to turn to debt sales worth tens of billions of dollars or seek external capital from fund managers such as BlackRock due to an unprecedented scale of investment. Meta said BlackRock-managed funds will take an 80 per cent ownership stake in the venture, with Meta retaining the remaining 20 per cent. A portion of BlackRock’s investment will be financed through $12.5 billion in debt. Meta will also receive a $1 billion distribution to align ownership. Meta will contribute land and in-progress construction assets worth about $2.3 billion, while BlackRock will make a cash contribution of about $4.9 billion, the company said. The Facebook-parent earlier said it was building an over $10 billion data center project in El Paso, near the Texas-New Mexico border, among 28 data centers it has in either operation or under construction in the U.S. The data center campus, already under construction, is designed to provide 1 gigawatt of compute capacity, essential for Meta’s AI technologies and supporting its core business. Operations are expected to commence in 2028. Meta has said it plans to invest $600 billion to build data centers by 2028, with an aim to fast-track work on personal superintelligence, which could help spin up new cash flows from the Meta AI app, image-to-video ad tools and smart glasses. The social media giant is building several gigawatt-scale data centers across the U.S., including one in rural Louisiana, a project Meta expected to expand to 5 gigawatts of compute capacity, with investment increasing to more than $50 billion. Shares of Meta had fallen about 10 per cent so far this year, as investors are scrutinizing costs of AI expansion. The company is scheduled to report second-quarter results on July 29. Morgan Stanley & Co and J.P. Morgan Securities served as financial advisors to Meta in connection with this transaction. Reporting by Jaspreet Singh in Bengaluru; Editing by Devika Syamnath, Reuters
