
Meta Platforms and BlackRock, the world's largest asset management company, announced a joint venture on Tuesday to build and operate a data center campus in El Paso, Texas. According to reports from Reuters, funds managed by BlackRock will hold an 80% stake in this venture, while Meta will retain the remaining 20%. A portion of BlackRock's investment will be financed through USD 12.5 billion in debt, with Meta also receiving a USD 1 billion distribution to adjust the ownership structure. The transaction is expected to close in the coming days, with capacity expected to come online in 2028.
The development project will cost approximately USD 14 billion, as reported by Reuters. Meta will contribute land and construction-in-progress assets valued at approximately USD 2.3 billion, while BlackRock will provide about USD 4.9 billion in cash. This represents a significant investment in Meta's AI infrastructure expansion strategy. The El Paso project represents an investment of over USD 10 billion from Meta and is expected to support more than 4,000 construction jobs at peak and 300 permanent operational positions.
The data center campus, currently under construction, is designed to provide 1 gigawatt of computing capacity. According to Reuters, this capacity is essential to support Meta's AI technology and core business operations. Meta will be the initial sole occupant upon completion and will provide construction management and property management services. The company will enter into lease agreements with the venture covering the entire campus, with a four-year initial term and four extension options, for a potential 20-year term. Meta will also provide residual value guarantees with an aggregate threshold of approximately USD 13 billion, decreasing over time.
This El Paso project is part of Meta's ambitious USD 600 billion plan to build data centers by 2028, as reported by Reuters. The company aims to fast-track work on personal superintelligence, which could generate new cash flows from the Meta AI app, image-to-video ad tools and smart glasses. Meta is building several gigawatt-scale data centers across the US, including one in rural Louisiana expected to expand to 5 gigawatts of compute capacity with investment increasing to more than USD 50 billion. The El Paso project demonstrates the company's commitment to building massive AI infrastructure despite market concerns about AI spending.
The El Paso project has already generated significant local economic activity, with over 2,300 workers currently on site. Meta has also provided a USD 500,000 grant to El Paso public schools for workforce development to support the growing technology sector. BlackRock's involvement includes its Global Infrastructure Partners and HPS Investment Partners subsidiaries, while Morgan Stanley and J.P. Morgan Securities served as financial advisors to Meta on the transaction. This project represents one of Meta's 28 data centers in the US that are either operational or under construction, demonstrating the company's massive AI infrastructure expansion strategy.