Meta Platforms Inc. will build a $14 billion artificial intelligence data center campus in El Paso, Texas, in partnership with BlackRock Inc., the world’s largest asset manager.
The two companies plan to finalize their joint venture agreement within days. Meta will contribute $2.3 billion in physical assets, including facilities already under construction. BlackRock will invest $4.9 billion and make an additional $1 billion payment to Meta.
The deal gives BlackRock an 80% stake in the campus. Meta will keep the remaining 20% and serve as the site’s only tenant when it opens in 2028. Its lease includes a four-year initial term with four optional renewal periods.
Related: Man jailed due to username mistake
Budget covers infrastructure, not chips
The $14 billion budget pays for buildings, power, cooling, and networking. Meta did not reveal the cost of the AI chips the campus will use, so the total project price could be higher.
Earlier this month, the company announced plans to spend over $50 billion on a data center campus in Louisiana. Bloomberg reported that the price tag will be $250 billion when taking into account chips and certain related items. That project follows a similar financial structure: last year, Meta sold an 80% stake to Blue Owl Capital in exchange for a $7 billion cash infusion.
It expects the El Paso campus to provide 1 gigawatt of AI-optimized computing capacity. Meta has announced three other 1-gigawatt data center projects in Ohio, Indiana, and Canada over the past two years, each costing around $10 billion. The higher budget for the Texas site may reflect a more advanced design or plans to support a rumored cloud infrastructure business.
This funding approach helps tech companies manage massive infrastructure costs. By selling majority stakes to institutional investors, they secure capital while maintaining control of essential assets. The strategy allows Meta to stay competitive in AI without depleting cash reserves.
Related: Classic Xbox game arrives on PC
Capital spending surges
Meta’s capital expenses reached $72 billion in 2023. This year, the company expects to spend between $125 billion and $145 billion. A potential cloud business could help cover some of these costs by creating new revenue streams.
The company already sells access to Muse Spark 1.1, its latest AI model, through an application programming interface.
The facility is set to begin operations in 2028, matching Meta’s long-term AI infrastructure timeline. No details about the design or hardware configurations have been released.