Strategic Infrastructure Expansion
Meta Platforms and BlackRock have announced a landmark joint venture to develop a massive 1-gigawatt artificial intelligence data center campus in El Paso, Texas. The project, valued at approximately $14 billion, represents one of the largest infrastructure commitments in the AI sector to date, signaling a shift in how major technology firms finance and scale the compute-intensive hardware required for next-generation AI models.
Under the terms of the agreement, funds managed by BlackRock will hold an 80% ownership stake in the venture, while Meta will retain a 20% stake. Meta will act as the facility’s sole tenant, overseeing construction, management, and administrative operations. The project is designed to provide the necessary infrastructure for training and deploying Meta’s expanding suite of AI models across its platforms, including Facebook, Instagram, and WhatsApp.
Financial and Operational Structure
The deal utilizes a complex capital structure to minimize Meta’s immediate balance sheet impact. At closing, Meta will contribute land and construction-in-progress assets valued at roughly $2.3 billion. BlackRock will invest approximately $4.9 billion in cash, with the remainder of the $14 billion total cost supported by $12.5 billion in debt financing raised by BlackRock funds. Additionally, Meta will receive a one-time distribution of $1 billion to align the ownership stakes.
Meta has secured the campus through an initial four-year lease agreement with four extension options, potentially providing up to 20 years of occupancy. To secure the financing, Meta has provided residual value guarantees totaling roughly $13 billion, which are scheduled to decline over the duration of the project.
Project Timeline and Market Stakes
The venture is expected to finalize in the coming days, with the first phase of computing capacity slated to come online in 2028. For Meta, the collaboration provides a pathway to scale AI compute capacity without the necessity of carrying the full asset cost on its own balance sheet. However, the project also ties the company to significant long-term financial obligations and exposes it to risks associated with power supply, regulatory hurdles, and project execution in a highly competitive landscape.
Financial advisors for the deal include Morgan Stanley & Co. LLC and J.P. Morgan Securities LLC for Meta, while Kirkland & Ellis LLP provided legal counsel for the BlackRock funds.