Meta Invests $290 Billion in Louisiana AI Data Center, Led by Pimco and Blue Owl

Meta, the social media giant, has announced a significant investment of $290 billion to expand its AI data center in a rural area of Louisiana. This ambitious project is being led by Pacific Investment Management Company (Pimco) and Blue Owl Capital Inc., who are providing the necessary financing. Pimco is expected to lead the debt financing portion, amounting to $260 billion, while Blue Owl will contribute $30 billion in equity financing. The debt portion may be issued in the form of investment-grade bonds backed by the data center assets.

Meta has collaborated with Morgan Stanley to attract top-tier private credit institutions through a competitive financing process. Apollo Global Management and KKR Group were among the final contenders for the lead investment role, with the possibility of additional investors being brought in during subsequent stages.

Private investment firms are actively seeking to expand their differentiated businesses through physical asset-backed transactions or high-rated corporate financing. The data center sector is seen as a major opportunity within the trillion-dollar asset-backed securities market, which is viewed as a significant growth area for many institutions.

This financing will enable Meta to accelerate its AI development efforts. The company's executives have revealed that its AI business has already generated "substantial" revenue. Meta has indicated that its cost growth will further accelerate next year, with a particular focus on AI infrastructure needs and advanced technology talent to optimize models.

Meta's Chief Financial Officer recently stated during an earnings call that, "We believe these models will attract significant external funding for large data center projects, leveraging our capability to build world-class infrastructure while maintaining flexibility in response to future demand changes."

Other tech giants are also collaborating with investment firms to build AI data centers. Microsoft, in partnership with BlackRock, has raised $300 billion in private equity capital, planning to deploy up to $1,000 billion in the sector. Elon Musk's xAI company secured $50 billion in debt financing through the syndicated loan market in June to advance the development of advanced AI models. Earlier this week, Apollo announced its agreement to acquire a majority stake in Stream Data Centers.