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Meta shifts El Paso data center into BlackRock-backed venture to cut risk
The plan follows Meta’s scrutiny over $125 billion to $145 billion of expected annual CapEx, with the company seeking to preserve compute capacity via a long-term lease.
Meta Platforms has moved a one-gigawatt data center development in El Paso into an 80/20 joint venture backed by BlackRock, a structure designed to offload capital expenditure risk while keeping access to the computing power needed for its artificial intelligence buildout, MarketBeat Ratings reports.
The transaction is tied to Meta’s efforts to address investor concern around aggressive CapEx guidance, which is closing in on a $125 billion to $145 billion range. The shift comes as the company has already spent just under $20 billion in the first quarter and would need to continue investing heavily to meet its annual projections.
MarketBeat Ratings also notes that analysts are watching profitability as advanced GPU costs and specialized liquid cooling requirements weigh on operating margins, which peaked near 48% late last year and have since compressed toward 41%. For Meta to hit its targets, the reporting says its quarterly cash burn would need to hover around $35 billion to $42 billion.
The BlackRock partnership arrives as Meta faces the market task of justifying large capital outflows in the second half of the year, with the outside financing intended to cushion potential impacts from any spending-target revisions as the AI race accelerates.