Meta Announces New Strategic Venture with BlackRock to Develop Data Center in El Paso

Meta and BlackRock commit $14 billion to a massive data center, but returns are years away.

What the company is saying

Meta and BlackRock jointly announce a venture to develop and own a data center campus, highlighting an investment of over $10 billion from Meta and a total development cost of approximately $14 billion. The announcement frames the project as 'state-of-the-art' with 1 gigawatt of compute capacity and emphasizes job creation, noting over 2,300 workers already onsite and projections of 4,000 construction jobs at peak. Meta stresses its role as the initial sole occupant and service provider for the campus, while BlackRock's 80% ownership stake and $4.9 billion cash contribution are foregrounded. The narrative is upbeat, focusing on scale, partnership, and community impact, including a $500,000 grant to local schools and workforce training initiatives. The language is assertive about future outcomes, but operational and financial benefits are positioned as forthcoming rather than realised. The announcement omits any discussion of expected revenues, profitability, or specific technical details beyond capacity and cost.

What the data suggests

The disclosed numbers confirm a capital-intensive project, with Meta contributing $2.3 billion in land and construction-in-progress assets and BlackRock providing $4.9 billion in cash, partially funded by $12.5 billion in debt. Ownership is split 80% to BlackRock and 20% to Meta, and Meta receives a $1 billion one-time distribution to align stakes. The total development cost is pegged at $14 billion, but there is no breakdown of how much has been spent to date versus future commitments. The only realised metrics are the current construction workforce (over 2,300 onsite) and the grant to local schools. All other key figures—1 GW compute capacity, 4,000 peak construction jobs, 300 operational jobs, and workforce training—are forward-looking and not yet achieved. No revenue, cash flow, or return projections are disclosed, and there is no evidence of operational performance or financial improvement. The data is detailed on capital structure but incomplete on future financial outcomes.

Analysis

The announcement is highly positive in tone, emphasizing the scale, partnership, and community impact of the data center project. However, most of the key claims are forward-looking, with the main operational benefits (1 GW compute capacity, 4,000 construction jobs at peak, 300 operational jobs, workforce training) not expected until 2028 or later. While the capital commitments are substantial and detailed, there is no disclosure of expected revenues, profitability, or cash flow, and no evidence that any operational or financial benefits have been realised to date. The only realised elements are the capital contributions, ownership structure, and current construction workforce (2,300 onsite). The language around 'state-of-the-art', 'investment of over $10 billion', and workforce/job creation is promotional, but not fully substantiated by realised outcomes. The gap between narrative and evidence is moderate: the project is underway, but the financial and operational upside remains unproven and long-dated.

Risk flags

• ●Execution risk is high due to the project's scale and long timeline, with the data center not expected to begin operations until 2028. Delays, cost overruns, or construction setbacks could materially impact the venture's economics.
• ●Financial risk is significant given the $14 billion total development cost, $12.5 billion in debt financing, and lack of disclosed revenue or profitability projections. The absence of operational cash flow or contracted income means investors have limited visibility on returns.
• ●Disclosure risk is present, as the announcement omits key financial metrics such as expected returns, payback period, or detailed cost breakdowns. Without these, investors cannot fully assess the project's viability or risk-adjusted upside.
• ●Concentration risk exists because Meta is the sole initial occupant and service provider, so the project's success is tied to Meta's ongoing commitment and performance. If Meta's needs change, the venture could face underutilization or renegotiation risk.
• ●Forward-looking statements dominate the announcement, with most benefits and job creation figures yet to be realised. This increases the chance that actual outcomes will diverge from projections, especially over a multi-year horizon.

Bottom line

This joint venture between Meta and BlackRock represents one of the largest single-site data center investments announced, with $14 billion in total costs and a complex capital structure. The only realised elements are capital contributions and current construction workforce, while all operational and financial benefits are projected for 2028 or later. The lack of revenue, profitability, or return disclosures means investors are being asked to take on substantial risk without clear upside. The project is highly capital intensive and exposed to execution, financial, and concentration risks, with Meta as the sole tenant and service provider. For investors, the announcement signals ambition and scale but does not provide actionable financial metrics or near-term catalysts. The most important takeaway is that this is a long-dated, high-risk infrastructure play with uncertain returns until operational milestones are met and financial performance is disclosed.

Announcement summary

(NASDAQ: META) and (NYSE: BLK) announced a venture to develop and own a data center campus in El Paso, Texas, representing an investment of over $10 billion from Meta. The state-of-the-art data center campus will have 1 gigawatt of compute capacity and is currently under construction, with over 2,300 workers already onsite. Funds managed by BlackRock will own an 80% interest in the venture, while Meta will retain the remaining 20% ownership, and the parties have committed to fund their respective pro rata share of the approximately $14 billion in total development costs. At financial close, Meta will contribute land and construction-in-progress assets valued at approximately $2.3 billion, and BlackRock will make a cash contribution of approximately $4.9 billion, with a portion of BlackRock's investment funded by a $12.5 billion debt financing. Meta will receive a one-time distribution of approximately $1 billion to align ownership stakes, and Meta will enter into lease agreements for the entire campus with a four-year initial term and four options to extend, providing up to a 20-year term. The transaction is expected to close in the coming days and the venture expects to begin bringing this capacity online in 2028. The El Paso data center will support more than 4,000 construction jobs at peak and 300 operational jobs once complete, and Meta provided a $500,000 grant to El Paso public schools to support workforce development.

Disagree with this article?