TL;DR · 30-second read
The Short Version
Meta, the company behind Facebook and Instagram, is building a huge computer complex in El Paso, Texas, to run its artificial intelligence products. It will draw about as much electricity as a large nuclear reactor produces.
The twist is that Meta is not paying for most of it. Funds run by BlackRock, the world’s biggest investment manager, will own 80% of the roughly $14 billion project, and Meta will rent the space back.
It is like building a house, selling most of it, and signing a long lease to keep living there. That shows how expensive the artificial intelligence race has become.
Meta Platforms and BlackRock announced on July 28, 2026 a joint venture to develop and operate a data center campus in El Paso, Texas, with development costs of about $14 billion, Reuters reported in a story carried by The Journal Record. BlackRock-managed funds will own 80% of the venture and Meta 20%. Meta is contributing land and in-progress construction valued at about $2.3 billion, BlackRock about $4.9 billion in cash, and part of BlackRock’s investment will be financed with $12.5 billion of debt. Meta will also receive a $1 billion distribution to align ownership.
The campus, already under construction near the Texas-New Mexico border, is designed for 1 gigawatt of compute capacity, with operations expected to begin in 2028. Meta will sign lease agreements with the venture, securing the capacity without funding or owning the campus outright.
Executive Summary
Meta has taken one of its largest AI construction projects and moved most of the ownership, and most of the funding burden, to an outside investor. Rather than paying for a 1-gigawatt campus upfront, Meta will hold a minority stake and pay rent for the capacity it uses. The deal lands as AI-related bond issuance has reached $270 billion by early July, according to BofA Global Research, nearly double all of 2025, and as Meta’s shares had fallen about 10% this year on concerns about AI spending.
The significance is structural. Hyperscalers, the handful of companies that run cloud and internet services at global scale, have mostly funded their own data centers. This venture shows a different model: an asset manager owns the building, the power and the land, lenders finance much of it, and the tech company becomes an anchor tenant. For investors watching Meta’s $600 billion U.S. infrastructure plan, it is a signal that not all of that money has to come from Meta’s own cash flow.
From Owner to Tenant: The Math Behind the 80/20 Split
The disclosed figures show how the ownership split was engineered. Meta contributes land and construction already underway, valued at about $2.3 billion. BlackRock-managed funds put in about $4.9 billion in cash. Meta then receives a $1 billion distribution to align ownership, which leaves its net contribution at roughly $1.3 billion. Against BlackRock’s $4.9 billion, that is about 21% of the combined equity, consistent with the stated 20% stake. In effect, Meta recovers a meaningful slice of money it had already spent on the site and hands the remaining funding burden to its partner.
The second half of the structure is the lease. Capital expenditure, or capex, is spending on long-lived assets such as buildings and equipment, paid upfront. Rent is paid over time. By signing lease agreements with the venture, Meta converts much of the cost of a gigawatt-scale campus from the first kind of obligation into the second. The $12.5 billion of debt that finances part of BlackRock’s investment means lenders to the venture, rather than Meta’s own bond investors, carry a large share of construction financing.
This is not money that disappears. Long-term leases are commitments, and under U.S. accounting rules they generally appear on a company’s balance sheet as liabilities. What changes is the shape of the obligation: spread over the lease term, paired with an outside owner that bears the long-term value risk of the asset, and freeing Meta’s cash for chips, other campuses or shareholders. The people most affected are Meta shareholders, who see lower near-term spending on this site; BlackRock’s fund investors, who take on a long-dated, single-tenant asset; and the venture’s lenders, who take construction and tenant risk.
Why Meta Wants Rent Instead of Receipts
The timing explains the appeal. Meta has said it plans to invest $600 billion in U.S. AI infrastructure, data centers and jobs by 2028, and is building several gigawatt-scale campuses, including a Louisiana site it expects to expand to 5 gigawatts with investment above $50 billion. At that scale, even a company with Meta’s cash flow runs into limits on how much it can spend or borrow directly without unsettling investors.
Matt Britzman, senior equity analyst at Hargreaves Lansdown, put the concern plainly: the scale of spending raises questions about cash flow, operating costs and returns, particularly because Meta does not yet have a large cloud business selling spare capacity to outside customers. Amazon, Microsoft and Google can rent surplus computing to others; Meta has mostly built for its own use. Reported talks to lease computing power to Anthropic, in a potential deal worth up to $10 billion over two years, suggest Meta is exploring that route, but no such deal had been announced.
Against that backdrop, a structure that trims upfront spending while keeping full access to the capacity is a direct answer to the question investors are asking. Whether it improves Meta’s economics depends on the lease rate, which has not been disclosed.
What BlackRock Is Actually Buying
For BlackRock’s funds, the attraction is a long-term stream of lease payments from one of the world’s largest technology companies, secured by physical assets and, crucially, by access to power. A campus designed for 1 gigawatt, roughly the output of a large nuclear reactor, is hard to replicate quickly, which gives the site value beyond its current tenant.
The risks are concentration and specialization. The venture has one disclosed tenant, and a building designed for dense AI computing is not easily repurposed. The asset’s long-term value depends heavily on Meta renewing its leases or on the venture finding other tenants willing to pay similar rates. Operations are not expected until 2028, so construction and schedule risk sit with the venture for the next two years.
One Deal, Not Yet a Template
Reuters framed the transaction within a broader pattern of tech companies turning to debt markets and fund managers for external capital. That pattern is visible in the bond figures, but one joint venture does not establish that Meta, or its peers, will finance every campus this way. The more telling test will be whether Meta applies the structure to Louisiana or other gigawatt-scale projects.
What the ownership change does not alter is the local footprint. The campus still needs the same power, land and community acceptance whether Meta or BlackRock owns it, and AI data center expansion faced 142 protests across 42 states in July. For utilities, local governments and residents, the relevant questions about electricity, water and tax treatment remain the same regardless of whose balance sheet carries the building.
Background
Meta Platforms, the parent of Facebook, Instagram and WhatsApp, has become one of the largest builders of AI data centers in the United States, with 28 sites in operation or under construction. It had earlier described El Paso as a more than $10 billion project and is also building a Louisiana campus it expects to grow to 5 gigawatts. Earlier in 2026 Meta appointed Dina Powell McCormick as president and vice chairman to drive partnerships with governments and investors for its AI projects.
BlackRock is the world’s largest asset manager. Its role here reflects a wider shift in which pension funds, insurers and other long-term investors, reached through managers like BlackRock, finance the physical infrastructure behind AI, much as they have long financed toll roads, pipelines and power plants. Source: Meta, BlackRock announce $14 billion AI data center project in Texas — Reuters report, via The Journal Record, on the El Paso joint venture’s ownership, financing and capacity.Sources