Meta Picks Partners for $29B Data Center Deal

Meta has selected Pacific Investment Management and Blue Owl to secure a $29 billion financing deal backing its Louisiana data center expansion, Bloomberg reported. Pimco will issue $26 billion in debt, while Blue Owl is expected to provide $3 billion in equity.

The parent company of Facebook and Instagram tapped Morgan Stanley to raise the capital in a competitive process, which included large private equity firms such as Apollo and KKR. Other investors could enter the deal at a later stage.

Meta will utilize the funds to accelerate its AI development. The company expects costs to increase at a quicker rate next year as it focuses on the infrastructure and tech talent required to fine-tune its models.

The social media giant’s initial vision consisted of a $10 billion, 4 million-square-foot data center campus, set to rise on a 2,250-acre site about 250 miles north of New Orleans. Site work already kicked off last December on what could become the largest data center across the entire Western Hemisphere.

Blue Owl’s commitment to data centers

Blue Owl had more than $284 billion in assets under management as of June 30, up 48 percent year-over-year, according to its second quarter earnings report. In May, the company closed its third digital infrastructure fund at $7 billion, surpassing its $4 billion goal.

That same month, Blue Owl’s joint venture with Crusoe and Primary Digital Infrastructure secured $7.1 billion for the development of the second phase of a 1.2-gigawatt AI data center in Abilene, Texas.

Data center investment balloons as tech firms pour billions into AI

As the AI arms race intensifies, the Magnificent Seven continue to pour billions into data center investments. Just last year, Microsoft partnered with BlackRock to raise $30 billion for AI investments. The tech giant followed up with plans to invest $80 billion during the 2025 fiscal year.

Just last week, Apple increased its total four-year commitment across the U.S. to $600 billion, revising its initial estimate of $500 billion. The funds will facilitate its data center expansion across North Carolina, Iowa, Oregon, Arizona and Nevada.

Alphabet, Google’s parent company, committed to spending $75 billion this year alone. Additionally, the firm pledged to invest $25 billion over the next two years to modernize the power grid across Pennsylvania, as it struggles to meet surging data center electricity demand.

Against the backdrop of all these massive investments, chipmaker NVIDIA was the world’s first publicly traded company to hit the $4 trillion mark last month. The company had reached $1 trillion in May 2023.