Meta bypasses balance sheet with $12bn BlackRock data deal
A massive bond sale to build a Texas data centre reveals how Big Tech is using off-balance-sheet structures to finance the AI boom, shifting infrastructure risk to asset managers.
JPMorgan and Morgan Stanley began pitching investors on Monday on a $12 billion bond sale to fund a roughly one-gigawatt data centre in El Paso, Texas. The facility will power Meta’s artificial intelligence operations, but the social media giant will not own the bulk of it. Instead, BlackRock and its private-credit and infrastructure arms will hold an 80% stake, leaving Meta with just 20%.
This ownership split is the crucial detail for markets tracking Big Tech’s capital expenditure. The debt will sit on the books of a BlackRock-controlled entity rather than Meta. By leasing the campus back from the asset manager, Meta records the cost as rent rather than capital spending. A recent Nikkei study estimated this exact off-balance-sheet approach accounts for $1.65 trillion across the five largest US tech firms.
El Paso is not an isolated experiment but a copied blueprint. Meta previously used a similar 80/20 joint venture with the credit firm Blue Owl for its Hyperion site in Louisiana. That entity executed a record $27 billion private-debt deal last year, in which BlackRock purchased more than $3 billion. Meta has also agreed to lease a facility in Shippingport, Pennsylvania, run by Aligned, a developer BlackRock acquired for $40 billion.
For BlackRock chief executive Larry Fink, the Texas project validates a costly strategic pivot. The $15 trillion asset manager spent roughly $25 billion acquiring Global Infrastructure Partners and HPS. Both acquired firms are backing the El Paso project, allowing BlackRock to act simultaneously as the asset originator and the debt seller. Fink told analysts last week that the two units were “coming together on the origination side.”
The financial structure carries distinct risks that institutional investors will scrutinize. The bonds being sold are long-dated, but the computer chips housed inside the data centre will depreciate in just a few years. Furthermore, the leases reportedly run shorter than the physical lifespans of the campuses they finance.
BlackRock is ultimately betting that AI demand and Meta’s rental payments will remain robust long enough to repay the debt. However, the deal concentrates an outsized share of the AI infrastructure build-out within a single firm. Rivals Blue Owl and Blackstone have previously led the largest data-centre financings, yet conversations around a potential bubble are intensifying. The El Paso campus is scheduled to come online in 2028.
