Meta and BlackRock have formed a strategic venture to finance, develop, and own a one-gigawatt data center campus currently under construction in El Paso, Texas. Funds managed by BlackRock will own an 80% interest in the venture, while Meta will retain the remaining 20%.
The parties have committed to fund their respective shares of approximately $14 billion in total development costs for the buildings and long-lived power, cooling and connectivity infrastructure supporting the campus.
At financial closing, Meta will contribute land and construction-in-progress assets valued at approximately $2.3 billion. BlackRock will contribute approximately $4.9 billion in cash.
Meta will receive a one-time distribution of approximately $1 billion to align the partners’ ownership positions with the venture’s 80-20 structure.
A portion of BlackRock’s investment will be financed using proceeds from a $12.5 billion debt transaction.
The structure allows Meta to obtain access to a large amount of computing capacity without directly funding and owning the entire campus. BlackRock and its investment platforms gain exposure to long-lived infrastructure, with Meta as the initial tenant.
BlackRock is participating alongside Global Infrastructure Partners and HPS Investment Partners, both of which are part of the asset manager.
Meta selected BlackRock following a competitive process as the technology company works to diversify its financing of the infrastructure required for its AI strategy.
The campus is expected to provide one gigawatt of computing capacity and begin bringing portions of that capacity online in 2028.
Meta will provide construction management, administrative and property management services. The company will also be the campus’s initial sole occupant after completion.
Meta will lease the entire campus from the venture. The agreements have an initial four-year term and four extension options, allowing Meta to use the property for up to 20 years.
Meta will also provide residual value guarantees with an aggregate threshold of approximately $13 billion that declines over time.
Under specified conditions during the first 16 years, Meta could be required to cover a shortfall between the property’s fair value and the applicable guarantee threshold.
Residual value guarantees help protect investors and lenders against the risk that the specialized campus is worth substantially less than expected at a future measurement date. The structure also creates a contingent obligation for Meta if the property’s value falls below defined levels.
Meta described the El Paso facility as an investment of more than $10 billion. The project is expected to support more than 4,000 construction jobs at peak and approximately 300 operating positions after completion.
More than 2,300 workers were already employed at the site when the venture was announced.
The campus participates in America’s Workforce Academy, a free skilled-trades training program that guarantees graduates a job with a Meta partner at one of the company’s data center locations.
Meta also provided a $500,000 grant to El Paso public schools to support workforce development, practical STEM education, and pathways into skilled trades careers.
BlackRock is separately supporting Future Builders, a national workforce initiative expected to train more than 12,000 electricians over three years through an investment of nearly $30 million.
Meta expects the campus to support the development and operation of advanced AI models while providing computing capacity for improvements across Facebook, Instagram, WhatsApp and its other businesses.
The transaction is expected to close within days of the announcement.
KEY QUOTE:
“Our partnership with BlackRock allows us to move faster and at greater scale.”
Mark Zuckerberg, Founder and CEO of Meta
