Meta $META Platforms and BlackRock $BLK announced a venture Tuesday to develop and own a data center campus in El Paso, Texas, with total development costs of approximately $14 billion.
BlackRock-managed funds will own 80% of the venture, with Meta retaining 20% and leasing back the entire campus
Photo by Laurent Hou/Hans Lucas /AFP via Getty Images
Meta $META Platforms and BlackRock $BLK announced a venture Tuesday to develop and own a data center campus in El Paso, Texas, with total development costs of approximately $14 billion.
Under the agreement, funds managed by BlackRock will control 80% of the venture, with Meta keeping the remaining 20% stake. At financial close, Meta will transfer land and partially built construction assets worth around $2.3 billion into the venture, while BlackRock is set to put in roughly $4.9 billion in cash. Meta will also receive a one-time distribution of approximately $1 billion to align ownership stakes. A portion of BlackRock's investment will be funded through $12.5 billion in debt financing, the company said.
The facility, which is currently being built, will deliver 1 gigawatt of compute capacity when finished. Meta will be the sole occupant upon completion, which is expected in 2028. Meta will enter into lease agreements with the venture for use of the entire campus, with a four-year initial term and four extension options covering a potential 20-year period. The transaction is expected to close in the coming days, the company said.
"Building the infrastructure for superintelligence is key to making sure the benefits of this technology are distributed to everyone," Meta founder and CEO Mark Zuckerberg said in a statement. "Our partnership with Larry and the team at BlackRock allows us to move faster and at greater scale."
BlackRock Chairman and CEO Larry Fink said in a statement that the El Paso campus "will create thousands of skilled jobs and help drive economic growth in the local community."
Meta's investment in the El Paso project exceeds $10 billion, supporting more than 4,000 construction jobs at peak and 300 operational jobs once complete, with over 2,300 workers already on site, the company said. BlackRock's investment in the venture also involves Global Infrastructure Partners and HPS Investment Partners, both part of BlackRock.
The El Paso deal follows the same structure as an earlier arrangement in Louisiana, where Meta sought to sell more than $12 billion in bonds to help finance the campus through a holding company tied to BlackRock's ownership position in the project, named Project Sopaipilla Holdings. That structure mirrors what Meta applied at its Hyperion data center in Louisiana, where a joint venture issued debt to keep liabilities off Meta's books.
Meta has publicly committed to spending $600 billion on data center construction through 2028. Meta stock has fallen about 10% so far this year, with the company scheduled to report second-quarter results on Wednesday.
Meta said Morgan Stanley $MS and J.P. Morgan Securities acted as its financial advisors for the deal.
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