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Meta Partners With BlackRock Over $14 Billion Data Center Project

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Meta Partners With BlackRock Over $14 Billion Data Center Project

Meta Platforms (META) and asset manager BlackRock (BLK) have teamed up to develop a data center campus in El Paso, Texas, at a cost of roughly $14 billion, the companies said Tuesday.

Technology giants are ramping up investments to support their artificial intelligence initiatives. Meta is targeting capital expenditures of $125 billion to $145 billion this year, including for data center buildouts.

The Facebook and Instagram parent said Tuesday it will invest more than $10 billion in the El Paso facility.

Meta intends to use the entire data center campus under an initial four-year lease agreement, with a maximum lease term of 20 years, according to a joint statement.

The partnership "allows us to move faster and at greater scale -- pairing our deep expertise in designing and operating world-class data centers with one of the world's leading infrastructure investors," Meta Chief Executive Mark Zuckerberg said.

BlackRock-managed funds will own an 80% interest in a venture to be formed with Meta, which will take the remaining 20% stake in it.

"Companies around the world are looking for long-term strategic partners to help develop their most important projects, and BlackRock is built to meet that need," BlackRock CEO Larry Fink said.

Meta, along with Alphabet (GOOG, GOOGL), Amazon.com (AMZN) and Microsoft (MSFT), are expected to spend $650 billion in capex, compared with $410 billion last year, asset management firm Bridgewater Associates said in February.

Some companies have sought financing for their AI initiatives, like CoreWeave (CRWV), which in March announced an $8.5 billion loan facility to expand its AI cloud platform.

Meta and BlackRock expect to close the deal in the coming days, with an aim to start capacity deployment in 2028.

The announcement comes ahead of Meta's second-quarter results, due out after market close on Wednesday. Shares of Meta were flat intraday Tuesday, while those of BlackRock advanced by 3.2%.

Price: $592.89, Change: $-0.98, Percent Change: -0.17%

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