EL PASO, TEXAS — Meta Platforms Inc. (NASDAQ: META), the parent company of Facebook, Instagram and WhatsApp, and BlackRock Inc. (NYSE: BLK) have formed a joint venture to develop and operate a data center campus in El Paso. The companies project that total development costs for the 1-gigawatt (GW) campus will be approximately $14 billion.
Meta will provide construction management, administrative and property management services for the campus and will be its initial sole occupant upon completion. The new data center campus “will play an essential role in bringing Meta’s AI technologies to life,” according to the companies.
“Building the infrastructure for superintelligence is key to making sure the benefits of this technology are distributed to everyone,” says Mark Zuckerberg, founder and CEO of Meta. “Our partnership with Larry [Fink] 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.”
Construction is currently underway in El Paso with approximately 2,300 workers onsite, according to Meta. The Menlo Park, Calif.-based company estimates that the project will employ 4,000 construction workers at its peak and 300 staffers once fully operational.
Meta selected BlackRock as its capital partner following a “highly competitive process.” BlackRock, which has approximately $15.3 trillion in assets under management, is bringing in affiliate firms Global Infrastructure Partners and HPS Investment Partners as part of the investment strategy.
Funds managed by BlackRock will own an 80 percent interest in the venture, while Meta will retain the remaining 20 percent ownership. The parties have committed to fund their respective pro rata share of the development costs for the buildings and the associated costs for power, cooling and connectivity infrastructure at the campus.
At financial close, Meta will contribute the venture land and construction-in-progress assets valued at approximately $2.3 billion, and BlackRock will make a cash contribution of approximately $4.9 billion. Meta will receive a one-time distribution of approximately $1 billion to align ownership stakes in accordance with the 80/20 ownership split. A portion of BlackRock’s investment will be funded with proceeds from a $12.5 billion debt financing.
Meta will enter into lease agreements with the venture for use of the entire data center campus. The leases have a four-year initial term with four options to extend, providing Meta with a potential 20-year term.
The transaction is expected to close in the coming days, and the venture expects to begin bringing the campus on line in 2028.
Meta’s stock price closed on Monday, July 27, at $593.87 per share, down from $717.63 a year ago, a more than 17 percent decline.
BlackRock’s stock price closed on Monday at $1,062.14, down from $1,117.82, a nearly 5 percent drop.
— John Nelson