Meta Platforms and BlackRock announced on Tuesday a joint venture to develop and operate a $14 billion artificial intelligence data center campus in El Paso, Texas1,2. The project will deliver 1 gigawatt of compute capacity starting in 20283.
Under the deal structure, funds managed by BlackRock will take an 80% ownership stake, with Meta retaining the remaining 20%. BlackRock will finance $12.5 billion of the project through debt. Meta will also take on $1 billion in debt. 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. Meta will also receive a $1 billion distribution to align ownership.
Meta will enter into lease agreements with the venture, allowing it to secure computing capacity without directly funding and owning the campus. The arrangement lets Meta access compute to power its own models and potentially grow its ability to lease computing power to others. Meta CEO Mark Zuckerberg has said that entering the cloud computing market is under consideration.
The two companies expect to finalize their joint venture agreement in the coming period.
The deal arrives as the cost of financing AI infrastructure is rising. Lenders are reportedly demanding higher yields on bonds for this project than on a similar project last year. Meta's shares are down 12% since the company's last earnings report, amid investor concern over growing AI spending. Meta said last year it planned to spend $600 billion on its data center buildout. The company has said it will spend as much as $145 billion this year. Wells Fargo is forecasting $247 billion in capital expenditure for Meta next year.
ANALYSIS The structure of the venture — with BlackRock carrying the majority of ownership and debt while Meta leases back capacity — shifts the balance-sheet burden of AI infrastructure buildout away from Meta at a time when its capital spending trajectory is drawing investor scrutiny. The arrangement also positions Meta to potentially monetize excess compute through third-party leasing, a revenue line that would be new for the company.