Meta Partners with Pimco and Blue Owl for $29B Data Center Financing

Meta Platforms has selected Pimco and Blue Owl to lead a $29 billion financing for its data center expansion in rural Louisiana. Pimco will lead a $26 billion debt portion, while Blue Owl will provide $3 billion of equity. The debt portion will be issued in the form of investment-grade bonds backed by the data center's assets. Meta is reaccelerating revenue growth using AI.

Meta Platforms has selected investment management firm Pimco and alternative asset manager Blue Owl Capital to lead a $29 billion financing deal for its data center expansion in rural Louisiana. Pimco will lead a $26 billion debt component of the financing, while Blue Owl will contribute $3 billion in equity. The debt portion is set to be issued in the form of investment-grade bonds backed by the data center's assets [2].

The financing deal is part of Meta's broader strategy to accelerate its AI initiatives. Last month, Meta CEO Mark Zuckerberg announced plans to spend hundreds of billions of dollars on building several massive AI data centers for its superintelligence unit, intensifying its pursuit of advanced technology [1].

Meta has been working with various financial institutions to secure the necessary funding. Morgan Stanley, Apollo Global Management, and KKR were also in the running to lead the deal until the closing stage of negotiations. The company has been exploring options to raise even more capital, with the Financial Times reporting that Meta is debating how to structure the debt raising [2].

The deal underscores Meta's commitment to investing in talent, infrastructure, and data centers to stay competitive in the AI race. The company's 2023 capital expenditure is projected to be between $66 billion and $72 billion, with a focus on AI advancements. Morgan Stanley recently raised its target price for Meta Platforms, citing the company's advancements in GPU algorithm technology as a key driver of user engagement and profitability [3].

References:
[1] https://www.marketscreener.com/news/meta-reportedly-picks-firms-to-lead-29-billion-financing-for-louisiana-data-center-expansion-projec-ce7c5edcd08efe27
[2] https://www.marketscreener.com/news/meta-selects-pimco-blue-owl-for-29-billion-data-center-financing-bloomberg-news-reports-ce7c5edddd8ffe25
[3] https://www.gurufocus.com/news/3039007/meta-platforms-meta-target-price-raised-by-morgan-stanley-amid-ai-advancements