Meta Platforms Inc and BlackRock Inc plan to build a 1-gigawatt data center in Texas that would cost about US$14 billion to develop, adding to a wave of investment in the computing hubs that power artificial intelligence (AI).The facility would go online in 2028 with Meta as the initial sole tenant, the company said yesterday. BlackRock funds would hold an 80 percent interest in the joint venture, while Meta would retain the remaining 20 percent.The US$14 billion development costs do not include the cutting-edge chips required to power AI models. A 1GW data center typically costs US$35 billion to US$50 billion.
Shown is a Meta store in Burlingame, California, on Monday.
Tech firms including Alphabet Inc, Amazon.com Inc, Meta and Microsoft Corp, have been building out data centers in pursuit of dominance in the still-nascent market for AI tools. The unprecedented scale of development is being financed through a mix of capital expenditure, private infrastructure funds, debt and sovereign wealth.
Meta would contribute land and other assets valued at about US$2.3 billion and receive a one-time payment of US$1 billion.BlackRock would contribute about US$4.9 billion in cash, with some of its portion funded by about US$12.5 billion of bonds that were sold on Monday after a nearly weeklong process and weak investor demand. The investment-grade debt offered yields that were more in line with riskier junk-rated bonds, which rose in early trading in part because of the hefty concessions it priced at.The El Paso project is part of Meta Compute, the social media company’s initiative to build out AI infrastructure and sell access to excess computing power. Meta would enter lease agreements for the facility with a four-year initial term, with options to extend.The joint venture with BlackRock “allows us to move faster and at greater scale,” Meta chief executive officer Mark Zuckerberg said in the statement.Earlier this year, Meta raised its spending outlook for the year to US$125 billion to US$145 billion, driven by heavy investment into AI infrastructure and higher component pricing. The company is scheduled to report its second-quarter earnings today, during which it should give an update on its spending plans.
