Meta Platforms Inc. and Blue Owl Capital Inc. are finalizing a financing package of nearly $30 billion for an AI data center in Louisiana. The agreement, one of the largest private capital deals ever recorded, establishes a new financial model for technology companies building expensive infrastructure.
Key Takeaways
- Meta and Blue Owl are completing a nearly $30 billion financing deal for the Hyperion data center in Louisiana.
- The deal uses a Special Purpose Vehicle (SPV), allowing the project to be financed without adding debt to Meta's balance sheet.
- Meta will retain a 20% ownership stake while serving as the developer, operator, and primary tenant of the facility.
- The project is expected to be completed by 2029 and will be one of the largest data centers in the world.
A New Approach to Funding AI Growth
The agreement centers on the Hyperion data center site located in Richland Parish, Louisiana. This massive project requires significant capital, leading the companies to adopt an innovative financing structure. Instead of Meta borrowing the funds directly, a separate legal entity known as a Special Purpose Vehicle (SPV) was created to hold the assets and the debt.
Under this arrangement, Blue Owl Capital and Meta will share ownership of the data center site. Meta's direct ownership will be limited to just 20%, according to sources familiar with the transaction. The tech giant will, however, manage the development and operation of the facility and will be its main tenant once construction is complete in 2029.
This financial strategy is becoming increasingly popular among large technology firms, often called "hyperscalers." It allows them to fund the enormous costs of AI infrastructure without negatively impacting their corporate credit ratings. By moving the debt off their primary balance sheets, companies can maintain financial flexibility for other operations.
What is a Special Purpose Vehicle (SPV)?
An SPV is a subsidiary company created by a parent company to isolate financial risk. Its legal status as a separate entity ensures that its obligations are secured by its own assets and are not the direct responsibility of the parent company. This structure is often used for large, capital-intensive projects like infrastructure development.
The Financial Architecture of the Deal
The financing for the Hyperion project was arranged by Morgan Stanley. The package includes over $27 billion in debt and approximately $2.5 billion in equity, all channeled into the SPV.
Several major financial institutions competed to participate in the deal. Ultimately, Pacific Investment Management Co. (Pimco) was selected as the anchor lender, providing a substantial portion of the debt capital. Blue Owl Capital also played a crucial role in securing the financing.
The debt portion of the deal is being issued as bonds in a 144A format, which is a market for private securities available to qualified institutional buyers. These bonds are scheduled to mature in 2049 and are fully amortizing, meaning the principal will be paid down over the life of the bond.
Investment-Grade Securities
S&P Global Ratings has assigned the bonds an investment-grade rating of A+. This high rating reflects the perceived stability of the project, backed by physical assets and a long-term lease agreement with Meta. The bonds are priced at approximately 225 basis points above U.S. Treasury yields.
The Scale of the Hyperion Data Center
The Hyperion facility is set to be the largest of Meta's 29 data centers worldwide. The complex will span an immense 4 million square feet. Its power requirements highlight the energy-intensive nature of modern AI computing.
At full capacity, the data center is projected to draw as much as 5 gigawatts of power. To put this into perspective, this is roughly the amount of electricity needed to power 4 million average American homes, based on an analysis of government data. This massive energy footprint is necessary to support the advanced computing chips that power artificial intelligence models.
This Louisiana site is a key part of Meta's broader strategy to expand its AI infrastructure. The company recently announced another gigawatt-sized data center complex in El Paso, Texas, and is also developing a large facility in Ohio.
A Blueprint for the Technology Industry
This financing model is viewed as a potential roadmap for other technology companies facing similar challenges. The race to develop AI has triggered a massive demand for capital. According to data compiled by Bloomberg, tech companies raised approximately $157 billion in the U.S. bond markets through late September 2025, a 70% increase from the same period last year.
This structured financing approach provides Wall Street investors with a way to invest directly in physical assets tied to the AI boom, while tech companies can pursue ambitious expansion without overloading their balance sheets.
Other major players are exploring similar strategies. For example, Elon Musk's AI startup, xAI, is reportedly pursuing a structure for a $20 billion fundraising effort where it would rent computing chips instead of purchasing them outright. This further illustrates the industry's shift toward asset-light models to manage the high costs of AI development.
Morgan Stanley, which advised Meta on the transaction, continues to solidify its role in the AI financing space. The bank has also advised xAI on a corporate debt raise and is currently marketing bonds for the cryptocurrency mining company TeraWulf Inc., another sector with high energy and hardware demands.