NEWS & ANALYSIS | INFRASTRUCTURE & POWER
AI’s physical expansion is being financed through managed funds, debt markets, utilities and public incentives. The bill has not disappeared. It has been divided.
By Andrew McDonald · Immortal AI
If an AI company needs a one-gigawatt data centre, a new power plant, water allocations, roads and long-lived tax concessions, who should pay?
A new deal between Meta and BlackRock gives us a more complicated answer than the usual corporate announcement. Meta creates the demand and will occupy the entire campus. BlackRock-managed funds will own most of the property. Debt investors will provide most of the announced financing. A regulated utility is planning generation to serve the load. The City of El Paso has already agreed to tax concessions, fee waivers and road support.
The project may still produce real benefits for El Paso. It may create jobs, contracts and a larger tax base. But the transaction exposes a question that sits beneath the entire AI boom: when enormous economic value depends on physical infrastructure, who supplies the capital, who receives the return, and who is left carrying the risk if the assumptions fail?
This article is a financing case study within Immortal AI’s Data Centre Community Impact investigation, which brings together the main findings, project tracker and practical community decision tools.
The US$14 billion structure
On 28 July 2026, Reuters reported that Meta and BlackRock had announced a venture to develop and own Meta’s data-centre campus in El Paso, Texas. The campus is designed for one gigawatt of compute capacity and is expected to begin coming online in 2028.
Funds managed by BlackRock will own 80 percent of the venture. Meta will retain 20 percent. The companies estimate about US$14 billion in development costs for the buildings and long-lived power, cooling and connectivity infrastructure.
At closing, Meta is expected to contribute land and construction already underway, valued at about US$2.3 billion. BlackRock-managed funds are expected to contribute about US$4.9 billion in cash. Meta is also expected to receive an approximately US$1 billion distribution to align the ownership split. A portion of the BlackRock investment will be supported by US$12.5 billion in debt financing.
EVIDENCE NOTE: Those figures describe different layers of the transaction. They cannot be added together as though the project suddenly costs US$19.7 billion. The debt finances part of the investment structure, while the US$14 billion figure describes announced development costs.
Meta will lease the entire campus. It will provide construction, administrative and property-management services. It will also provide residual-value guarantees with an aggregate threshold of about US$13 billion that declines over time.
This is not a clean transfer of risk from Meta to BlackRock. Meta remains the tenant, the operating brain of the project and a major source of credit support. The structure reduces the amount of property Meta must own and fund directly, but it works because lenders and investors believe Meta will keep paying.
BlackRock is not one pool of money
The words “BlackRock will own 80 percent” can create the wrong mental picture. The announced owners are funds managed by BlackRock. The economic risk therefore sits primarily with investors in those funds, subject to the protection created by Meta’s leases and guarantees. BlackRock manages the capital and may earn fees, but the underlying beneficiaries and their precise exposure have not been disclosed at project level.
The same caution applies to the banks. J.P. Morgan and Morgan Stanley advised on the transaction and financing. Banks can arrange, underwrite and distribute debt without holding all of it for the full term. The final holders of the US$12.5 billion financing are not listed in the joint announcement.
So the private capital chain is already wider than the headline: Meta, managed-fund investors, debt investors, banks and advisers. Each can receive a different return. Each carries a different part of the risk.
Then comes the public layer
The financing announcement covers the campus. It does not remove the need for public systems around it.
El Paso’s existing agreements with the project company provide an 80 percent abatement of certain city property taxes for ten years for each eligible phase. A separate Chapter 380 agreement provides grants equal to 80 percent of applicable city property-tax revenue for 15 years for the initial project and later eligible phases. The same agreement waives multiple city development and permit fees and allows up to US$7.5 million of city road reimbursement, with a possible 20 percent increase if costs run higher.
This does not mean El Paso receives no tax revenue. It means the net public benefit cannot be measured by quoting the project’s US$14 billion development cost. The calculation must start with taxes actually retained, then deduct grants, abatements, fee waivers, infrastructure, maintenance and other public costs.
The gap between promotional numbers and enforceable terms is also important. Meta projects more than 4,000 construction jobs and 300 operating jobs once the campus is complete. Those are company claims about future outcomes. The existing local incentive agreements require 50 full-time jobs across all phases combined for the full benefit after the employment commitment date.
There may be good reasons for that difference. The agreements were written before the project expanded. The extra jobs may still arrive. But communities should understand what is contractually required and what is only promised.
This is the wider power question examined in AI’s Promise Is Real. So Is the Power Shift. The organisations capturing AI’s value can move faster than communities can negotiate the physical consequences.
The power bill has its own timetable
El Paso Electric has proposed a 366 megawatt gas-fired bridge plant, known as McCloud, because the data centre’s load is expected to grow faster than the existing system can accommodate. Reporting based on the utility’s regulatory filing says Meta would cover all costs during an initial five-year bridge period.
That is meaningful protection. It is also incomplete as a lifecycle answer. The plant could operate far longer than the bridge period. The longer-term allocation of costs and the plant’s role in the wider system remain subject to regulatory decisions.
In July, the City of El Paso moved to intervene in a separate proceeding over El Paso Electric’s proposed data-centre rate changes. The City said it wanted to ensure families and businesses were not asked to subsidise the costs of serving large users. That does not prove costs will be shifted. It proves the risk is real enough to require regulatory scrutiny.
Meta says it is paying the full cost of energy used by the campus and will add enough clean-energy projects to match 100 percent of its electricity use. The first statement needs to be tested across the life of the assets. The second should not be confused with proof that the El Paso campus runs on local renewable power every hour. Annual energy matching and local physical supply are different questions.
Water shows the same pattern
El Paso’s draft data-centre policy records a maximum Meta water allocation of 2.5 million gallons a day at full implementation, with an average of 1.5 million gallons. The City says supplying Meta under the current plan would not cause water-rate increases.
Meta says it will use closed-loop liquid cooling, avoid using water for cooling during most of the year, restore 200 percent of the water it consumes, and pay the full cost of water and wastewater service.
Those commitments may prove valuable. They remain promises until the campus operates and independent data shows actual consumption, peak demand, wastewater effects, drought performance and the additional water created by restoration projects.
This is becoming a model
The El Paso deal matters because it is not Meta’s first transaction of this kind.
In October 2025, Meta announced a similar venture for its Hyperion campus in Richland Parish, Louisiana. Blue Owl-managed funds took 80 percent and Meta kept 20 percent. The venture was expected to fund approximately US$27 billion in development costs. Meta contributed land and construction assets, leased the completed facilities and provided residual-value protection. Part of the capital was raised through debt issued to PIMCO and other bond investors.
Two projects do not establish a universal industry rule. They do establish a repeatable financing option: the AI company supplies the demand, operational control and credit anchor, while managed funds and debt markets supply much of the property capital.
That model can be commercially sensible. It gives investors access to long-lived infrastructure backed by a powerful tenant. It gives Meta flexibility and reduces the amount of property sitting directly on its balance sheet. It can accelerate construction without asking a government to finance the data-centre buildings themselves.
But it also fragments accountability. The landlord may be a special-purpose venture. The equity may come from funds whose ultimate investors are not visible locally. The debt may be distributed through capital markets. The electricity assets may be utility-owned. The tax agreements may sit with a subsidiary. The technology and profits may remain with Meta.
What the evidence allows us to say
FACT: Meta is the demand source and sole initial occupant. BlackRock-managed funds are the announced majority property owner. Debt supplies most of the disclosed financing. Meta retains material lease, operational and residual-value exposure.
FACT: El Paso has granted project-specific tax abatements, property-tax grants, fee waivers and possible road reimbursement. A regulated utility is proposing generation linked to the data-centre load.
CLAIM: The project will deliver thousands of construction jobs, 300 operating jobs, broad economic growth, full private payment of utility costs, clean-energy matching and water restoration. These claims may be credible, but most are not yet observed outcomes.
UNKNOWN: The total public subsidy value, final debt ownership, long-term utility cost allocation, actual water use, durable local jobs and net economic value retained by El Paso.
The question every host community should ask
A government evaluating an AI data centre should demand a map of the entire economic chain before approving incentives:
- Who owns the land, buildings, computing equipment and utility assets?
- Who contributes equity, who lends, and who ultimately holds the debt?
- What lease, guarantee and collateral supports repayment?
- Who pays if the project is delayed, downsized or abandoned?
- How long do ratepayer protections last compared with the life of the infrastructure?
- What is the present value of every tax concession and public commitment?
- How many resident jobs and how much local value are contractually required?
- What remains in the community after investors, lenders, utilities and the AI company receive their returns?
The Meta-BlackRock deal does not show that private investors have dumped the entire AI infrastructure bill onto the public. The evidence does not support that claim. It shows something subtler and more important: the bill is being split into property risk, debt risk, tenant risk, utility risk, fiscal cost and community exposure. Each piece can sit with a different institution.
AI may create enormous economic value. Its companies may capture much of that value through advertising, software, cloud services and intellectual property. The physical system that makes it possible is increasingly financed and supported by a much wider group.
The Immortal AI Foundations ask who has the power, who bears the risk and who remains responsible for the outcome. Data-centre financing makes those questions physical.
Before a community celebrates the investment figure, it should ask whether the physical bill follows the profits, or settles on people who never negotiated the deal.
Principal sources
- Reuters: Meta and BlackRock partner on US$14 billion El Paso data-centre venture
- Meta and BlackRock joint transaction announcement
- City of El Paso Chapter 380 agreement
- City of El Paso Chapter 312 tax-abatement agreement
- City of El Paso draft Data Center Policy Framework
- Argus: Meta funding the McCloud bridge plant
- Meta El Paso project update
- Meta and Blue Owl Hyperion venture announcement
Editorial note: The venture was newly announced at the research cutoff. The final debt-holder list and complete private agreements are not public. Relevant utility proceedings remain open and future performance cannot yet be observed. This article does not make a final judgement about whether a typical data centre is net positive or net negative.
AI disclosure: Immortal AI uses AI-assisted research and drafting. Sources, claims, framing and final editorial decisions remain the responsibility of Immortal AI.


