Meta has signed a $27 billion financing deal with Blue Owl Capital to fund the Hyperion data center in Louisiana, which will be the company’s biggest data center till date. This is Meta’s largest-ever private capital deal.
Under this deal, Meta will retain about 20% equity in the Louisiana project with the majority owned by funds that alternative asset manager Blue Owl Capital manages. Blue Owl contributed roughly $7 billion in cash to the joint venture with Meta receiving a one-time payout of about $3 billion.
The data center is projected to deliver more than two gigawatts of compute capacity to support training of large language models. This comes at a time when AI companies are racing to build infrastructure required to power the technology.
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“We’re proud that our funds are partnering with Meta on the development of the Hyperion data center campus — an ambitious project that reflects the scale and speed required to power the next generation of AI infrastructure. Blue Owl’s ability to deliver substantial capital at scale, combined with our deep experience supporting hyperscalers, makes us uniquely positioned to help bring mission-critical digital infrastructure to life. We look forward to continuing our work with Meta and contributing to the long-term growth of the Richland Parish community,” said Doug Ostrover and Marc Lipschultz, co-CEOs of Blue Owl Capital.
Susan Li, the CFO of Meta said, “Our AI ambitions will be realized through our ability to deliver the infrastructure to support it. Our partnership with Blue Owl Capital to develop the Hyperion Data Center is a bold step forward — combining Meta’s deep expertise in building and operating world-class data centers with Blue Owl’s strength in infrastructure investment.”
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Meta said that it entered into operating lease agreements with the joint venture for use of all of the facilities of the campus once construction is complete. These lease agreements will have a four-year initial term with options to extend, providing Meta with long-term strategic flexibility.
The company also mentioned that a portion of capital raised by Blue Owl will be funded by debt issued to PIMCO and select other bond investors through private securities’ offering.
“It definitely helps them mitigate risks at the expense of its ownership stake. Meta won’t need to provide nearly as much capital and can look to finance other facilities or AI infrastructure,” said Alvin Nguyen, senior analyst at Forrester, about this deal. “It also minimizes the debt they are taking on for equipment and property in the event there is a bursting of the AI bubble.”