Meta Platforms Inc. Launches Groundbreaking Joint Venture for Hyperion Data Center Development

The partnership between Meta and Blue Owl Capital is set to establish and own the Hyperion data center campus, a project designed to enhance Meta's agility and speed in executing critical data center operations. With over 15 years of experience in developing and managing world-class data centers, Meta brings substantial expertise to this venture. Meanwhile, Blue Owl Capital offers its substantial capital resources and deep knowledge in digital infrastructure investment, positioning the joint venture to meet the growing demands of hyperscale data processing.

Under the terms of the agreement, Blue Owl Capital will hold an 80% interest in the joint venture, while Meta retains a 20% ownership stake. Both parties have committed to funding their respective shares of the estimated $27 billion total development costs. This includes investments in essential infrastructure such as power, cooling, and connectivity systems vital for the data center's operation.

To kickstart the joint venture, Meta contributed land and construction-in-progress assets previously classified as held-for-sale, while Blue Owl Capital injected approximately $7 billion in cash. Subsequently, Meta received a one-time distribution of approximately $3 billion from the venture.

Doug Ostrover and Marc Lipschultz, Co-CEOs of Blue Owl Capital, expressed their enthusiasm for the partnership, emphasizing the project's scale and its critical role in powering the next generation of AI infrastructure. They highlighted Blue Owl's unique position to support the rapid execution of essential digital projects.

Susan Li, CFO of Meta, reinforced the strategic importance of the collaboration, stating, "Our AI ambitions will be realized through our ability to deliver the infrastructure to support it." She noted that the partnership combines Meta's proficiency in data center operations with Blue Owl's investment acumen.

Rachel Peterson, VP of Data Centers at Meta, added that the construction is already well underway, employing thousands of workers and expected to create over 500 operational jobs in the Richland Parish community.

Meta has entered into operating lease agreements with the joint venture for the use of all facilities upon completion of construction. These agreements will feature a four-year initial term with extension options, offering Meta significant strategic flexibility in its operations.

To further enhance this flexibility, Meta has provided the joint venture with a residual value guarantee for the first 16 years of operations. This guarantee entails a capped cash payment based on the campus's then-current value if certain conditions are met post-termination of a lease.

A portion of the capital raised by Blue Owl Capital will be financed through debt securities issued to PIMCO and select other bond investors via a private securities offering. Morgan Stanley & Co. LLC served as the exclusive financial advisor to Meta for this transaction and acted as the sole bookrunner for the securities offering.

The advisory team for Meta also included legal counsel from Latham & Watkins LLP and Eversheds Sutherland, with Arthur D. Little LLC providing commercial due diligence. Marsh contributed project risk analysis and insurance services, while Arup offered technical and environmental engineering support.

Meta's joint venture with Blue Owl Capital marks a pivotal step in the company's trajectory toward enhancing its data center capabilities and supporting its AI objectives. With substantial financial backing and robust operational strategies, the Hyperion Data Center is poised to play a crucial role in meeting the demands of the evolving digital landscape. As this ambitious project develops, it will not only strengthen Meta's infrastructure but also contribute significantly to local employment and economic growth.