Meta Partners with Morgan Stanley, JPMorgan for El Paso Data Center Investment

Meta Platforms Inc. Seeks $13 Billion Financing Package for Texas Data Center

Meta Platforms Inc. is working on a financing package for a data center in El Paso, Texas, that could total roughly $13 billion, highlighting the growing reliance of Big Tech on debt to fund the infrastructure behind the AI boom.

The financing package, dubbed Sopaipilla, is being led by Morgan Stanley and JPMorgan Chase & Co., according to people familiar with the matter. A large majority of the financing is expected to be in the form of debt, with the rest equity, the people said. This is similar to Meta's previous financing package, which was completed last year for a data center site in rural Louisiana. In that deal, worth almost $30 billion, Meta raised the funding through an entity known as Beignet Investor LLC, named after the popular Louisiana pastry.

Meta's effort on Sopaipilla is notable, as the company is spending more than $10 billion on the data center in El Paso, which was a jump from prior projections, Bloomberg News reported in March. The gigawatt-sized data center is expected to come online in 2028 and will support more than 300 on-site jobs once completed. Meta has also said its construction needs will grow given the increased investment, and now anticipates 4,000 temporary workers to be on site during the peak construction period.

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The data center financing market has exploded since the Beignet transaction, with more than $20 billion of bonds and loans launched in the high-yield space in the past three weeks alone. In contrast, the table below shows the significant increase in data center financing:

Meta itself raised $25 billion in bonds last week, but investors have shown signs of fatigue amid the deluge. With Meta's shares down about 7.5% this year, there are concerns over the company's outlook, as investors worry that the company's investments in artificial intelligence won't pay off.

Representatives for Meta, Morgan Stanley, and JPMorgan declined to comment, as discussions are still in the early stages and terms remain fluid.

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