Meta has picked Pimco and Blue Owl Capital for a US$29 billion financing deal to support its data center projects in rural Louisiana.

Pimco will lead the US$26 billion debt portion, expected to be issued as bonds, while Blue Owl will provide US$3 billion in equity.

Meta, the parent company of Facebook, has been working with Morgan Stanley to secure funding.

Apollo Global Management and KKR were reportedly in talks to lead the deal until late-stage negotiations.

In June, the Financial Times reported Meta was seeking US$29 billion from private capital firms for US AI data centers.

Meta, Pimco, and Blue Owl declined to comment.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ Power infrastructure bottlenecks are reshaping AI data center development

Meta’s Louisiana location choice reflects a broader industry challenge where power availability has become a primary constraint for AI data center development.

AI data centers are projected to consume 6.7-12% of U.S. electricity by 2028, up from just 4.4% in 2023, creating unprecedented demand on the electrical grid 1. The scale is significant—these facilities are expected to require 500 terawatt-hours of power by 2027, forcing companies to prioritize locations based on available power capacity rather than traditional factors like proximity to urban centers 2.

Power transmission bottlenecks have become a considerable impediment, causing delays in new data center projects across the industry 2. This explains why Meta’s investment targets rural Louisiana, where power infrastructure is more readily available compared to traditional tech hubs.

The shift represents a change in site selection criteria, with companies now emphasizing available power capacity and proximity to transmission lines over other considerations 3.

2️⃣ Tech giants are moving toward off-balance-sheet infrastructure financing

Meta’s $29 billion financing structure signals a strategic shift away from traditional self-funded infrastructure development toward partnership-based models that preserve financial flexibility.

The company recently sold $2.04 billion in data center assets specifically to alleviate the financial burden of AI infrastructure costs, demonstrating how even cash-rich tech companies are seeking to share these massive capital requirements 4. This leaseback approach allows Meta to maintain operational flexibility while investing in core AI technologies rather than tying up capital in real estate assets 5.

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