Meta and BlackRock forge $14 billion venture to build massive El Paso data center for AI

Meta BlackRock Venture Reshapes AI Infrastructure Financing

Meta Platforms and the world's largest asset manager, BlackRock, announced a joint venture to develop and operate a data center campus in El Paso, Texas, with total development costs reaching approximately $14 billion 1

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. Under the agreement, funds managed by BlackRock will control an 80% ownership stake in the venture, while Meta retains the remaining 20% 2

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. The structure represents a strategic shift in how tech giants finance AI infrastructure, allowing Meta to keep most of the massive project off its own books while accelerating development.

The financial mechanics reveal why this deal matters. Meta will contribute land and construction-in-progress assets worth about $2.3 billion, while BlackRock will make a cash contribution of roughly $4.9 billion at financial close 3

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. Meta will also receive a one-time distribution of approximately $1 billion to align ownership stakes 4

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. Crucially, a portion of BlackRock's investment will be financed through $12.5 billion in debt raised against the project rather than against Meta, enabling the company to book its use of the campus as rent instead of capital expenditure 2

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AI-Focused Data Center Campus Delivers Massive Computing Power

The El Paso data center campus, already under construction, is designed to provide 1 gigawatt of compute capacity essential for Meta's AI technologies and supporting its core advertising business 1

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. Operations are expected to commence in 2028, when Meta will become the sole tenant under lease agreements featuring a four-year initial term with four extension options that could stretch the arrangement to 20 years 3

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. The AI-optimized computing capacity positions the facility among Meta's largest infrastructure projects, joining other 1-gigawatt sites in Ohio, Indiana, and Canada 5

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Mark Zuckerberg framed the partnership as critical to Meta's ambitions, stating that "building the infrastructure for superintelligence is key to making sure the benefits of this technology are distributed to everyone" 3

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. The venture allows Meta to "move faster and at greater scale" by combining its data center expertise with BlackRock's infrastructure investment capabilities 2

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. Meta has committed to investing $600 billion on data center construction through 2028, with aims to fast-track work on personal superintelligence that could generate new revenue streams from the Meta AI app, image-to-video ad tools, and smart glasses 1

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Large-Scale AI Infrastructure Financing Sets New Template

The El Paso deal follows a financing structure Meta pioneered with its Hyperion campus in rural Louisiana, where the company kept the majority of its $200 billion project off its balance sheet by handing 80% to an outside investor and leasing the site back 2

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. This approach matters more than usual because Meta has guided to $125 billion to $145 billion in capital expenditure for 2026, a range raised in April, and faces pressure to demonstrate that the AI build-out will eventually pay for itself 2

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. Shares of Meta had fallen about 10% so far this year as investors scrutinize costs of AI expansion 1

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Larry Fink, BlackRock's chief executive, positioned the deal as proof of his firm's expanding capabilities, saying it demonstrates "the strength and scale of our combined capabilities with GIP and HPS" 2

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. BlackRock is running the deal through Global Infrastructure Partners and HPS Investment Partners, arms it has pointed at data center assets since acquiring Aligned Data Centers for $40 billion 2

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. The firm now sits on both sides of these transactions, originating the infrastructure and selling the debt that funds it.

Workforce Development and Economic Impact

Construction is expected to support more than 4,000 jobs at peak activity, with about 2,300 people already working on site 2

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. The completed facility will employ roughly 300 people full-time in operational roles 3

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. BlackRock committed to workforce development through its Future Builders initiative, a nearly $30 million program aiming to train more than 12,000 electricians over three years to address labor shortages in energy, infrastructure, and data center construction across Texas 3

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Meta tied the project to local education, awarding El Paso public schools a $500,000 grant to expand STEM programs and skilled trades pathways 3

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. The campus participates in America's Workforce Academy, a free skilled trades program guaranteeing graduates employment with Meta partners at data center locations 3

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. Meta also pledged to continue funding water restoration projects to improve water quality and strengthen local supplies 3

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Long-Term Questions Around Returns and Risk

The structure carries inherent risks that industry watchers will monitor closely. The debt behind these campuses tends to be long-dated while the servers inside depreciate within a handful of years, and the lease can run shorter than the hardware it houses 2

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. Meta will provide residual value guarantees tied to the long-term value of the site's buildings and critical infrastructure 3

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. The obvious question, as one analysis noted, is what happens if the compute Meta is acquiring at this scale takes longer than 2028 to earn its keep 2

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Meta's broader strategy includes building several gigawatt-scale data centers across the U.S., including the Louisiana project expected to expand to 5 gigawatts of compute capacity with investment exceeding $50 billion 1

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. The company is also reportedly building a cloud infrastructure business that could ease efforts to realize returns on these long-term capital investments 5

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. Meta already sells access to Muse Spark 1.1, its newest AI model, via an API enabling other companies to integrate it into applications 5

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. Morgan Stanley and J.P. Morgan Securities served as financial advisors to Meta for the transaction 1

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