In a strategic shift to manage the soaring costs of artificial intelligence infrastructure, Meta has entered a joint venture with alternative asset manager Blue Owl Capital to develop the US$27bn Hyperion data center campus in Richland Parish, Louisiana. The deal gives Meta a 20% minority stake in the project, with Blue Owl taking the controlling 80% interest, signaling a new capital-intensive phase in the tech industry’s AI arms race.
This innovative financial arrangement allows Meta to continue its ambitious expansion of AI capabilities while leveraging institutional investment to shoulder the immense financial burden. Blue Owl is contributing approximately US$7bn in cash, while Meta provides land and existing construction assets from its Louisiana holdings. In return for its smaller ownership stake, Meta receives an upfront cash distribution of US$3bn and retains full operational control over the facility’s construction and management, ensuring the data center meets its specific technological needs.
A Novel Financial Architecture
The Meta-Blue Owl partnership represents a creative approach to funding the next generation of digital infrastructure. Rather than bearing the entire multi-billion-dollar cost alone, Meta has offloaded the majority of the capital expenditure to an investment partner specializing in large-scale real assets. This structure provides Meta with immediate capital and long-term flexibility. Upon completion, Meta will lease the facility from the joint venture for an initial four-year term, which includes options for extension.
To secure the arrangement, Meta has provided a residual value guarantee for the first 16 years of the facility’s life. This guarantee promises to cover any potential shortfall if the data center’s assets do not retain their expected value, offering a crucial safety net for Blue Owl’s investment. Susan Li, Meta’s Chief Financial Officer, stated that the company’s AI goals depend on its ability to build the necessary infrastructure to support them. The partnership combines Meta’s expertise in operating world-class data centers with Blue Owl’s strength in infrastructure investment, creating a model that may become more common as technology companies navigate the high costs of AI development.
The Hyperscale Demands of AI
The US$27bn valuation of the Hyperion project underscores the immense costs associated with building data centers capable of handling advanced AI workloads. Modern AI models require massive computational resources, driving up demand for electricity, water, and specialized hardware. The global race to build AI-ready infrastructure has led to a surge in data center construction, with facilities growing larger and more power-intensive. Some new hyperscale data centers require between 100 and 500 megawatts of power, equivalent to the energy demand of a small city.
This escalating demand places significant strain on energy grids and is driving up operational costs, with energy now accounting for 40% to 60% of expenses in some AI-focused data centers. The trend is fueling an investment boom, with spending on AI infrastructure projected to exceed $1.5 trillion by 2030 as adoption becomes widespread. The sheer scale of these projects, requiring vast tracts of land and access to massive power and water resources, makes them complex and expensive undertakings that are increasingly reliant on partnerships with large-scale institutional investors.
Blue Owl’s Strategic Infrastructure Focus
For Blue Owl Capital, an alternative asset manager with $273bn in assets under management, the Hyperion venture is a cornerstone of its digital infrastructure strategy. The firm specializes in providing private capital solutions for long-term growth and has identified digital infrastructure as a generational market opportunity. Blue Owl recently closed a $7bn digital infrastructure fund intended to finance the development of data centers for hyperscale clients, driven by the growth of AI and cloud computing.
Co-CEOs Doug Ostrover and Marc Lipschultz emphasized that building AI infrastructure requires both scale and speed, positioning their firm as a key partner for technology giants. The investment in Hyperion reflects Blue Owl’s strategy of funding mission-critical digital assets that support the world’s largest technology companies. Matt A’Hearn, Head of Blue Owl Digital Infrastructure, noted that “size is critical in partnering with hyperscalers,” and the firm’s financial strength allows it to meet the growing capital needs of the sector. The partnership with Meta provides Blue Owl’s investors with access to a high-value project backed by a leading technology firm.
Transformative Local Economic Impact
Job Creation and Investment
The Hyperion data center is a transformative project for Richland Parish, a rural community in Northeast Louisiana. The construction phase is expected to employ thousands of skilled trade workers, with more than 5,000 on-site during peak activity. Once operational, the 4 million-square-foot facility will support over 500 permanent positions in roles ranging from IT and network infrastructure to electrical maintenance and security. According to Louisiana Economic Development, the project is expected to create over 1,000 additional indirect jobs in the region. An independent economic impact study projects that construction wages alone will total $1.28bn.
Community and Workforce Development
Meta has committed to investing in the long-term vitality of the community. The company is partnering with local institutions like Louisiana Delta Community College to develop training programs focused on data center operations and other high-tech skills. Rachel Peterson, Meta’s Vice President of Data Centers, affirmed the company’s long-term commitment to its partnership with Richland Parish. The project also includes significant local investment, with plans for $200 million in local infrastructure improvements covering roads and water systems. Upon opening, Meta will launch its Community Action Grants program to support local schools and nonprofits, further integrating the massive facility into the fabric of the local economy.
