Meta, BlackRock Form $14B Texas Data Center Venture
Meta Platforms and BlackRock have formed a joint venture to develop a 1-gigawatt artificial intelligence data center campus in El Paso, Texas, committing approximately $14 billion to one of the largest AI infrastructure projects announced to date.
Under the agreement, funds managed by BlackRock will acquire an 80% ownership stake in the venture, while Meta will retain the remaining 20%. Meta will oversee construction management, administration and property management for the campus and will serve as the facility’s sole tenant upon completion.
At closing, Meta will contribute land and construction-in-progress assets valued at approximately $2.3 billion, while BlackRock will invest approximately $4.9 billion in cash. Meta will also receive a one-time distribution of roughly $1 billion to align the ownership structure with the agreed 80/20 split. A portion of BlackRock’s investment will be financed through $12.5 billion in debt financing.
“Our partnership with Larry and the team at BlackRock allows us to move faster and at greater scale—pairing our deep expertise in designing and operating world-class data centers with one of the world’s leading infrastructure investors,” said Mark Zuckerberg, Meta founder and chief executive officer.
Meta will lease the entire campus under an initial four-year agreement with four extension options, providing occupancy flexibility for up to 20 years. The company will also provide residual value guarantees totaling approximately $13 billion, with the guarantee declining over time.
“This transaction highlights the strength and scale of our combined capabilities with GIP and HPS, and how we can offer clients compelling investment opportunities at the center of AI infrastructure and energy,” said Larry Fink, chairman and chief executive officer of BlackRock.
The transaction is expected to close in the coming days, with the venture targeting the first phase of computing capacity to come online in 2028,
Morgan Stanley & Co. LLC and J.P. Morgan Securities LLC served as financial advisors to Meta. Latham & Watkins LLP served as legal counsel to Meta and Eversheds Sutherland (US) LLP advised Meta on leasing matters. Arthur D. Little LLC acted as commercial due diligence advisor to Meta. Marsh provided Meta project risk analysis and insurance services. Arup provided technical and environmental independent engineer services to Meta. Kirkland & Ellis LLP served as legal counsel to the BlackRock funds. Charles River Associates, Turner & Townsend, and Marsh acted as technical advisors to BlackRock. Milbank LLP served as legal counsel to J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC.
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