Analysis
Meta and BlackRock announced Tuesday that funds managed by the asset manager will take an 80% ownership stake in a new joint venture to develop and operate a roughly $14 billion data center campus in El Paso, Texas -- the latest and one of the largest examples yet of a hyperscaler turning to outside capital to fund the AI buildout rather than carrying the full cost on its own balance sheet.
Under the deal, BlackRock-managed funds are contributing approximately $4.9 billion in cash, a portion of which is financed through $12.5 billion in debt, while Meta retains a 20% stake and contributes land and construction-in-progress assets valued at roughly $2.3 billion. Meta's total investment in the campus, once construction and equipment are included, tops $10 billion. The facility is slated to go online in 2028 with Meta as the sole initial tenant, and the buildout is expected to support more than 4,000 construction jobs at its peak and roughly 300 permanent operational roles once complete.
The structure extends a financing pattern Meta pioneered earlier this year with its approximately $27 billion Hyperion data center venture alongside Blue Owl Capital: rather than fund a multibillion-dollar campus entirely from its own cash flow or corporate debt, Meta brings the land and partially built infrastructure, an outside capital partner brings the bulk of the cash and takes majority economic ownership, and Meta leases back the capacity it needs. The approach keeps the asset off Meta's core balance sheet while still guaranteeing it the compute it wants.
“Meta's total investment in the campus, once construction and equipment are included, tops $10 billion.”
BlackRock's participation is itself notable. The world's largest asset manager has spent much of 2026 building out a dedicated AI infrastructure investment arm, treating hyperscaler data centers as a new institutional asset class alongside its traditional fixed-income and equity businesses -- a shift that lets pension funds, insurers and other long-duration capital pools gain direct exposure to AI infrastructure economics without buying Magnificent Seven equity.
The deal lands the same week Wall Street is scrutinizing hyperscaler capital spending more closely than at any point this year. Amazon, Meta and Microsoft all report earnings within days of each other, and investors have grown newly sensitive to any AI capex figure that doesn't come with a credible revenue story attached, following a sharp sell-off after Alphabet's own capex disclosure spooked the market last week.
For GPs and LPs, the El Paso deal is a data point in a much bigger structural shift: asset managers are becoming direct financiers of AI infrastructure rather than passive holders of hyperscaler equity, and the debt embedded in these off-balance-sheet vehicles is a form of leverage that doesn't show up cleanly on Meta's own books even though Meta's business is what ultimately services it. That distinction matters enormously if AI demand growth disappoints.
What to watch: whether other hyperscalers strike comparable joint ventures with BlackRock or its asset-management peers before this earnings cycle ends, how rating agencies treat the debt embedded in these structures when assessing Meta's effective leverage, and whether El Paso's 2028 timeline holds given how many similarly ambitious gigawatt-scale campuses have already slipped in 2026.
