Meta Platforms Inc. and the investment firm BlackRock Inc. are to partner on a project to build a data centre campus with a capacity of around 1 GW in El Paso, Texas.
According to a statement from Meta, the project will cost $14 billion. BlackRock will hold an 80 per cent stake in the joint venture, with Meta holding the remaining 20 per cent.
The deal is expected to be finalised in the coming days. The data centre’s computing facilities are scheduled to come online in 2028.
Meta will be the first and only tenant of the facility once construction is complete, and will enter into a lease agreement for the entire campus. The initial lease term will be four years, whilst the agreement provides for the possibility of four extensions, allowing the company to use the facility for at least 20 years.
Meta will contribute a plot of land and the facilities under construction, with a total value of $2.3 billion, to the joint venture’s capital, whilst BlackRock will contribute $4.9 billion in cash. To bring the capital structure into line with the ownership shares, Meta will receive a one-off payment of $1 billion.
BlackRock’s investment will be financed through borrowing: the company has issued bonds worth $12.5 billion.
The project’s $14bn cost does not include the expense of the cutting-edge chips required to equip the data centres, notes Bloomberg. Typically, chips providing 1 GW of computing power cost between $35bn and $50bn.
Meta’s shares fell by 1 per cent during Tuesday’s trading, whilst BlackRock’s shares rose by 1.7 per cent.