Meta Platforms and BlackRock have entered into a joint venture to develop and operate a massive data center campus in El Paso, Texas, with an estimated total development cost of $14 billion. The partnership underscores the growing reliance of major technology companies on external capital to fund the escalating infrastructure demands of artificial intelligence.
Under the terms of the agreement, funds managed by BlackRock will hold an 80% ownership stake in the venture, while Meta will retain the remaining 20%. BlackRock's investment will be partially financed through $12.5 billion in debt, and Meta will receive a $1 billion distribution as part of the transaction to align ownership interests. Meta is contributing land and construction assets already under development, valued at approximately $2.3 billion, while BlackRock will make a cash contribution of about $4.9 billion.
The El Paso campus is designed to provide 1 gigawatt of compute capacity, which Meta says will be essential for its artificial intelligence technologies as well as its core business operations. Construction is already underway, and the facility is expected to begin operations in 2028. The site is located near the Texas-New Mexico border and is among 28 data centers that Meta has either operating or under construction in the United States.
This venture reflects a broader trend of technology companies seeking outside capital to fund AI infrastructure, as the scale of investment required has pushed firms to tap debt markets and partner with large asset managers. BlackRock's involvement highlights the increasing role of institutional investors in financing AI-related projects. Morgan Stanley & Co. and J.P. Morgan Securities served as financial advisors to Meta in connection with the transaction.
Meta has previously stated plans to invest $600 billion in building data centers by 2028, linking this spending to its goal of accelerating work on personal superintelligence. The company expects its AI efforts could support new sources of cash flow, including the Meta AI app, image-to-video advertising tools, and smart glasses. Meta is also developing other large-scale data center projects in the U.S., including one in rural Louisiana that could eventually expand to 5 gigawatts of compute capacity with an investment exceeding $50 billion.
Investors have been closely scrutinizing Meta's aggressive capital expenditure on AI infrastructure. Shares of Meta have fallen about 10% so far this year as the market weighs the costs and potential returns of these investments. The company is scheduled to report its second-quarter results on July 29, which will provide further updates on its capital commitments.
The partnership with BlackRock represents another step in Meta's effort to fund its infrastructure expansion while retaining a minority ownership position. The $14 billion El Paso project is expected to become operational in 2028, and construction will continue as Meta expands its data center footprint to support its AI technologies and core business operations.
This article is for informational purposes only and does not constitute financial advice.
