Meta and BlackRock announce a joint venture to develop and operate a 1-gigawatt AI datacenter campus in Texas, with total capital commitment of $14B. Marks a major shift in datacenter financing structure (hyperscaler + institutional asset manager partnership).
Meta Platforms Inc. is bringing BlackRock Inc. into its AI infrastructure buildout through a new $14 billion venture to develop and own a 1-gigawatt data center campus in El Paso, Texas. The venture will fund the construction and operation of the campus, which Meta says will provide the compute capacity needed to train and deploy next-generation AI models. The El Paso campus is expected to deliver 1 gigawatt of compute capacity, with the first infrastructure slated to come online in 2028.
Meta said the site will play a key role in training and deploying its next-generation AI models, supporting what CEO Mark Zuckerberg has described as the company's long-term pursuit of superintelligence.
The deal structure gives BlackRock-managed funds an 80% stake in the venture with Meta retaining the remaining 20%. At closing, Meta will contribute land and construction-in-progress assets valued at approximately $2.3 billion, while BlackRock will invest roughly $4.9 billion in cash, funded in part through $12.5 billion in debt financing. Meta will also receive a one-time distribution of about $1 billion to align ownership with the agreed stake split.
Meta will lease the entire campus from the venture under an initial four-year agreement with options to extend the arrangement for up to 20 years, giving the company long-term access to the compute infrastructure while sharing the upfront capital burden with institutional investors.
The partnership underscores an ongoing shift in AI infrastructure financing, as technology companies increasingly tap institutional investors to fund the multibillion-dollar data centers needed to support advanced AI systems.
Meta is set to report second-quarter earnings on Wednesday after the bell, with the market expecting earnings per share of $7.4 on revenue of $60.3 billion. During the same period a year ago, Meta reported an EPS of $7.14 on revenue of $47.5 billion. Wall Street will closely watch Meta's capital expenditure forecasts, with investor Steve Eisman warning Monday that markets will go "straight down" if any hyperscaler cuts its capital expenditure.
Meta shares were up nearly 1% in Tuesday's pre-market trade, while BlackRock shares edged lower by 0.03%. Retail sentiment on Stocktwits around Meta trended bearish at the time of writing. META stock is down 10% year-to-date, while BLK stock is down 1%.