- BlackRock-managed funds will own 80% of the venture, contributing $4.9 billion in cash plus $12.5 billion in debt financing; Meta retains 20% and contributes $2.3 billion in land and construction-in-progress assets [1] - The El Paso campus will deliver 1 gigawatt of compute capacity, with operations expected to begin in 2028 and more than 4,000 construction jobs at peak [2] - Meta will lease computing capacity from the venture rather than own the campus directly — a structure designed to address investor concerns about data center spending returns [3] - The deal is part of Meta's broader plan to invest $600 billion in AI infrastructure by 2028, announced one day before the company reports quarterly earnings [3] - AI-related bond issuance reached $270 billion by early July 2026, nearly doubling all of 2025's total
[3] Meta Platforms and BlackRock on Monday announced a joint venture to develop and operate a $14 billion data center campus in El Paso, Texas, one of the largest single-site AI infrastructure deals to date. BlackRock-managed funds will take an 80% ownership stake, with Meta retaining the remaining 20% [1].
Under the terms, Meta will contribute land and construction-in-progress assets valued at approximately $2.3 billion, while BlackRock will make a cash contribution of roughly $4.9 billion. A portion of BlackRock's investment will be financed through $12.5 billion in debt. Meta will receive a one-time distribution of approximately $1 billion to align ownership stakes [1].
The 1-gigawatt facility is expected to come online in 2028 and will create more than 4,000 construction jobs at peak, with 2,300 workers already on site. The financial close is expected in the coming days [2].
The announcement arrives one day before Meta is scheduled to report second-quarter earnings, and as the company's shares have fallen roughly 10% year-to-date amid investor scrutiny of its escalating AI capital expenditures [3].
The Deal Structure #
The venture is structured so that Meta will lease computing capacity from the campus rather than own it outright — a model designed to shift a significant portion of capital costs off Meta's balance sheet while keeping the company as anchor tenant. The initial lease term is four years, with four additional four-year extension options for a potential 20-year span [1].
Meta will provide residual value guarantees with an aggregate threshold of approximately $13 billion, declining over time. Meta's total investment in the project exceeds $10 billion [2].
The structure echoes a growing trend among hyperscalers seeking to tap institutional capital for AI buildouts rather than funding them entirely from operating cash flow. AI-related bond issuance reached $270 billion by early July 2026, nearly doubling 2025's total [3].
Why It Matters #
The El Paso venture is part of Meta's stated plan to invest $600 billion in AI infrastructure by 2028. The company is simultaneously developing a data center in Louisiana with potential expansion to 5 gigawatts of compute capacity and investment exceeding $50 billion [3].
For BlackRock, the deal extends the asset manager's push into AI infrastructure as an alternative-investment asset class. CEO Larry Fink said the partnership demonstrates BlackRock's ability to offer 'compelling investment opportunities at the center of AI infrastructure' [2]. Analysts have flagged that Meta's AI spending trajectory raises questions about cash flow and returns, particularly since the company — unlike Microsoft or Amazon — does not generate substantial external cloud services revenue to offset infrastructure costs [3].
Community and Workforce Impact #
Beyond the 4,000-plus construction jobs at peak and 300 permanent operational roles, the companies announced community commitments tied to the project. Meta pledged a $500,000 grant to El Paso public schools [2].
BlackRock's Future Builders initiative will invest approximately $30 million to train more than 12,000 electrician apprentices over three years, addressing a skilled-labor bottleneck that has slowed data center construction nationwide [2].
What's Next #
The financial close is expected within days, with construction continuing through 2028. Meta reports second-quarter earnings on July 29, where management will face questions about the return profile of its AI infrastructure spending and how ventures like the BlackRock partnership affect its capital expenditure outlook [3].
The deal also sets a template that other hyperscalers may replicate. Microsoft, Google, and Amazon have all explored or executed similar off-balance-sheet financing arrangements as the industry confronts the reality that AI compute buildouts require capital at a scale that strains even the largest corporate balance sheets [3].
Companies mentioned #
Further sources #
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