Meta has secured a $27 billion funding agreement with Blue Owl Capital for its largest global data center initiative, as major tech firms compete to develop the infrastructure required for their artificial intelligence goals.

The deal represents Meta's biggest private capital transaction to date. Meta will maintain approximately 20 percent ownership in the Louisiana venture, while funds managed by alternative asset firm Blue Owl Capital will hold the majority stake.

Blue Owl invested around $7 billion in cash into the partnership, resulting in Meta receiving a one-time payment of approximately $3 billion.

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The proposed data center facility in Richland Parish, Louisiana, called Hyperion, is expected to provide over 2 gigawatts of computing power to support the development of large language models, which are the underlying technology for applications like ChatGPT and Google Gemini.

Blue Owl Co-CEOs Doug Ostrover and Marc Lipschultz described Hyperion as "an ambitious project that reflects the scale and speed required to power the next generation of AI infrastructure."

 

Leading technology corporations, such as Alphabet, Amazon.com, Meta, Microsoft and CoreWeave, are expected to invest $400 billion in AI infrastructure during this year, according to Morgan Stanley projections.

OpenAI, the company central to the AI revolution, has recently entered into several agreements that could exceed $1 trillion in cost to obtain approximately 26 gigawatts of computing power, sufficient to supply electricity to about 20 million American households.

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Meta's chief financial officer, Susan Li, described the latest agreement as "a bold step forward." The company has executed lease agreements for the facility with an initial four-year period and extension options, anticipating the project will generate over 500 employment opportunities when operational.

"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.

"It also minimizes the debt they are taking on for equipment and property in the event there is a bursting of the AI bubble."

This unprecedented agreement indicates that major technology corporations responsible for developing artificial intelligence infrastructure are exploring alternative methods to secure funding for their extensive AI initiatives. Previously, these large-scale companies have typically covered the costs of their data center projects entirely in advance, which has diminished their available cash reserves.

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In this arrangement, Blue Owl uses the data center as security and generates income primarily through rental payments, whereas Meta obtains access to the completed infrastructure without needing to provide the full $27 billion construction cost upfront.