Meta's $29 Billion Deal Shows High Financial Stakes of AI Investments

Pimco clinched a deal to finance Meta's $29 billion data center for AI efforts, beating out Apollo and KKR. The deal is part of the rapidly growing private credit market, which has loaned $450 billion to the tech sector as of early 2025. BlackRock is also entering the market, rolling out a new fund to buy discounted venture capital stakes from other investors.

Pacific Investment Management Co. (Pimco) has secured a significant $29 billion deal to fund Meta Platforms Inc.'s sprawling data center in Louisiana. The deal, arranged by Morgan Stanley, is one of the largest private credit deals to date and highlights the growing importance of private capital in funding artificial intelligence (AI) infrastructure [1].

Pimco, a leading institutional bond firm, and Blue Owl Capital Inc. outmaneuvered Apollo Global Management Inc. and KKR & Co. to secure the deal. The competition for this deal was intense, with Morgan Stanley approaching four of the world’s biggest asset managers in July. Pimco and Blue Owl were chosen for their ability to fund the entire deal quickly [1].

The deal is a significant win for Pimco, which has been diversifying beyond its background in publicly traded debt. Alongside Morgan Stanley, Pimco will arrange $26 billion of investment-grade bonds for the Meta project, while Blue Owl will put up $3 billion in equity funding. This marks a strategic move for Pimco, which has been looking to expand its role in private credit [1].

The Meta financing is not finalized, and the details are still in flux. However, potential investors have had initial discussions about pricing the bonds at 1.5 percentage points above the company’s publicly traded debt. Some of the securities are expected to be syndicated in the coming weeks [1].

The deal highlights the massive financial stakes behind the rise of AI. The data centers being built in just the next two years will require some $150 billion of financing, according to an analysis released by JPMorgan Chase & Co. on Aug. 7. Half of that could be bundled into commercial mortgage-backed securities, leaving another $70 billion to $90 billion up for grabs [2].

The race to capture this business comes with obvious risks. The most visible face of the AI industry, OpenAI, released its latest chatbot, GPT-5, to tepid reviews this month, ramping up questions about whether the progression toward super intelligence is slowing down. However, the opportunity is too big for any financial firm to pass up [1].

Meanwhile, the private credit market has been booming. UBS Global Research warns of potential overheating in the AI sector as private credit lenders become a significant source of capital for tech companies. Tech lending has nearly doubled in the past year, with private debt loaned to the technology sector reaching approximately $450 billion in early 2025 [3].

BlackRock is also entering the market, rolling out a new fund to buy discounted venture capital stakes from other investors. This move further underscores the growing trend of private credit financing in the tech sector [3].

References:
[1] https://www.ainvest.com/news/pimco-wins-29-billion-meta-deal-outmaneuvering-apollo-kkr-private-credit-competition-2508/
[2] https://blog.ucs.org/paul-arbaje/entergy-wants-to-fast-track-gas-plants-for-meta-data-center-leaving-ratepayers-with-the-bill/
[3] https://theoutpost.ai/news-story/private-credit-fuels-ai-boom-raising-overheating-concerns-19206/