Meta Platforms is preparing to raise $12 billion through a BlackRock-backed special-purpose vehicle to fund a nearly one-gigawatt data center in El Paso, Texas, with the deal expected to launch as early as next week, according to a Financial Times report. Early discussions indicate bond investors are seeking yields above 7%, approximately 0.4 percentage points higher than the company secured during its $27 billion Hyperion financing completed in October. The higher borrowing cost reflects intensifying competition for capital as major technology companies pour record amounts into artificial intelligence infrastructure, with Alphabet, Amazon, Microsoft and Oracle collectively issuing approximately $121 billion of bonds during 2025 compared to roughly $40 billion in 2020.
Meta Platforms stock edged 0.6% lower in pre-market trade on Friday following the Financial Times report. Retail sentiment around the company remained in bearish territory over the past day on Stocktwits.
Meta Faces Increased Interest Costs on $12 Billion Data Center Financing
The 0.4 percentage-point yield increase could translate into tens of millions of dollars in additional annual interest expense when applied to a $12 billion offering, according to a credit investor focused on investment-grade debt quoted by the Financial Times. The new special-purpose vehicle, Sopaipilla Investor, will hold an 80% stake in the Texas project, with Meta owning the remaining 20%. The bonds will mature in 2048 and are backed by Meta's 20-year lease commitment beginning in 2028. The agreement includes renewal options every four years and significant penalties if Meta exits the project early. Pricing could still change before the deal launches.
Technology Giants Issue $121 Billion in AI Infrastructure Bonds During 2025
Meta joins other major technology companies in tapping debt markets to fund AI expansion. Alphabet issued $20 billion of bonds in February, including a rare 100-year sterling bond, to help finance its expanding AI infrastructure plans. The company raised its 2026 capital expenditure guidance to $195 billion to $205 billion, up from its previous range of $180 billion to $190 billion. Capital spending during Alphabet's June quarter doubled from a year earlier to $44.9 billion, bringing total spending for the year to nearly $78.6 billion.
Combined, Alphabet, Amazon, Meta Platforms, Microsoft and Oracle issued approximately $121 billion of bonds during 2025, compared with roughly $40 billion in 2020. Morgan Stanley expects global AI-related debt issuance to reach around $570 billion in 2026. About $236 billion had already been priced by the end of May, roughly four times the pace seen a year earlier.
Meta Platforms stock has fallen over 8% this year and is down more than 15% in the last 12 months.
FAQ
What is Meta raising $12 billion for?
Meta Platforms is raising $12 billion through a BlackRock-backed special-purpose vehicle to fund a nearly one-gigawatt data center in El Paso, Texas. The bonds will mature in 2048 and are backed by Meta's 20-year lease commitment beginning in 2028.
How do Meta's current borrowing costs compare to its October financing?
Bond investors are seeking yields above 7% for Meta's latest data center financing, approximately 0.4 percentage points higher than the company secured during its $27 billion Hyperion financing completed in October. This increase could translate into tens of millions of dollars in additional annual interest expense on the $12 billion offering.
How much have technology companies borrowed for AI infrastructure in 2025?
Alphabet, Amazon, Meta Platforms, Microsoft and Oracle collectively issued approximately $121 billion of bonds during 2025, compared with roughly $40 billion in 2020. Morgan Stanley expects global AI-related debt issuance to reach around $570 billion in 2026, with about $236 billion already priced by the end of May.
