OWL

$Meta Platforms(META.US) announced on its website a strategic partnership with BlackRock to invest in a data center campus. The two will form a JV to own the El Paso data center.

To be clear, this is not a brand-new build; it is one of Meta’s five in-house data centers planned years ago, located in El Paso, TX, with 1GW of capacity. It is slated to go live in 2028. So the news marks incremental progress within the existing campus plan.

The campus is expected to cost $14bn in total (land, buildings, grid, cooling systems, etc.). BlackRock will shoulder ~80% of the funding, and Meta ~20%. The setup closely mirrors the Meta–Blue Owl structure announced last year; see Dolphin Research’s schematic.

Overall, this structure reduces Meta’s visible on-balance-sheet burden while financing what is essentially a 1P, in-house data center. Yesterday, in our capex take on $Alphabet - C(GOOG.US), we also highlighted its off-balance-sheet approach to scaling compute capacity.

This has become a common Big Tech playbook to meet infra needs without spooking the market. We should incorporate these off-balance-sheet obligations into risk assessments. That said, this works mainly for giants with strong core businesses which, beyond providing guarantees, are effectively monetizing their high-quality credit.