Meta Platforms, Inc. and BlackRock, Inc. have formed a joint venture to build a $14 billion [1] AI data center in El Paso, Texas.
The partnership allows Meta to expand its artificial intelligence capabilities while shifting a significant portion of the financial burden to an external investor. This move comes as the company faces immense pressure to scale its infrastructure to compete in the global AI race.
According to the announcement made on July 28 [3], the venture is structured as an 80/20 ownership split. BlackRock will own 80% of the facility, while Meta will retain 20% [2]. This arrangement is designed to help Meta offset the high costs associated with its aggressive AI build-out [4].
The project is situated in El Paso, a location chosen to support the massive power and cooling requirements of modern AI hardware [1]. The scale of the investment reflects the growing necessity for specialized data centers capable of training large-scale models.
This strategic shift follows a volatile period for Meta's valuation. Earlier this year, the company saw its share price drop by about 10%, which wiped $175 billion from its market capitalization [2]. By partnering with BlackRock, Meta reduces the direct capital expenditure required for its physical infrastructure.
Investors are closely watching the development as Meta prepares for its earnings report scheduled for July 29 [3]. The company said that AI infrastructure will remain a primary focus of its capital allocation strategy for the foreseeable future [4].
“BlackRock will own 80% of the facility, while Meta will retain 20%.”
This partnership signals a shift in how Big Tech firms fund the physical layer of AI. By utilizing a joint venture with a massive asset manager like BlackRock, Meta is treating data centers more like real estate assets than internal corporate hardware. This reduces balance sheet risk while ensuring the company has the compute power necessary to maintain its competitive edge in generative AI.
