Meta’s $200 Billion Bet on a Remote Data Center

0:01 - In a bid to catch up in the AI race, Meta is building its biggest and most ambitious AI data center in Richland Parish, Louisiana, one of the poorest regions in the United States. - It's a $10 billion bet on northeast Louisiana. - This is going to be a 7.5 gigawatt data center, fueled by 10 newly constructed natural gas plants. To put that in perspective, 7.5 gigawatts looks like the consumption of New York City on a winter day.

0:31 - But look at that, that's the size of Manhattan, so that's superimposed over the island of Manhattan. - It's a project so expensive that it's being financed by one of the biggest private capital deals ever assembled. Meta now anticipates it'll spend $200 billion. The people of Richland, they're turning to Meta with hope and perhaps a sense of faith. - It's going to be generational. It's going to be transformational. - Meta was able to clinch a deal that offered it quite a lot of benefits, and the question is, what does the community get in return?

1:07 Richland Parish is named for that rich land, born from the silt of the Mississippi River. It's got a deep and complicated history with ties to its cotton plantations. Production has largely shifted to soybean and corn and there has been a cycle of economic hardship. Currently, a quarter of the population lives below the poverty line, and now many are looking to Meta to help with this economic revival. What Meta is doing here is spending hundreds of billions of dollars to build out infrastructure to fuel its AI ambitions.

1:42 A lot of communities are rising up against data centers, so companies are getting smarter about ensuring they're building in places where local politicians are going to help clear red tape. That's led the biggest companies to the south. In 2023, Mark Zuckerberg actually turned to his staff and he said he wanted the biggest data center to bring together a million GPUs and his team set out looking for where to place a data center of this scale. Entergy Louisiana had caught wind that Meta was looking in the south, and so at the outset of 2024, they made their pitch.

2:17 - Louisiana has before it, one of the greatest economic opportunities I've ever seen. It's gonna take leadership and execution. - Its CEO. Philip May said they could provide all the energy that they needed, but more importantly, they could provide connections to getting a data center of this scale achieved at speed. As this deal was being hashed out in 2024, it had earned the internal code name Project Sucre, the French word for sugar. Through public records requests we learned how the negotiations unfolded.

2:52 Meta had told Louisiana officials it would only move forward with the project if it received a tax exemption on expensive data center equipment like GPUs. Lawmakers weren't going to be able to introduce entirely new legislation because of where they were in the calendar. So state leaders slipped Meta's demands into an unrelated rural broadband bill. - You know, all the other southern states have adopted things like this, and that's why they're seeing these large investments that Louisiana so far has missed out on.

3:20 - Meta promised 300 jobs at 150% the average annual state salary or about $82,000 a year and that number would push to 500 jobs a bit later on for Meta to reach the full tax incentives, say about an 80% reduction in property taxes on this broader facility. If Meta missed those targets, the deal wasn't nullified. It just reduced the potential tax incentives and there was no requirement to hire locally.

3:50 At the time that Meta began its search. Something interesting was already happening with Louisiana politicians. Mike Johnson had unexpectedly become Speaker of the House and there were other politicians, notably House Majority Leader, Steve Scalise also from Louisiana. Together they were forming this coalition that lended an outsized power to the state of Louisiana in Congress. Throughout 2024, Senator Marsha Blackburn of Tennessee, worked to advance the Kids' Online Safety Act, a bipartisan bill that would hold social media platforms including Meta, accountable for harms to minors.

4:28 - Social media companies intentionally design their platforms to addict our children, and to profit from our children. - Now, the bill had sailed through the Senate in the summer and she had hoped it would sail through the house as well, but Representative Johnson raised what he said were concerns about free speech, and that really set Senator Blackburn back. - We had a guest a couple of days ago who suggested that one of the reasons you are not taking it up is because Meta, which would be impacted is gonna build a 10, I think a $10 billion facility for AI in northern Louisiana.

5:06 - That that's a creative argument. I mean that, that's not even in my district. Okay, look, we're glad of the investment in Louisiana, but that has nothing whatsoever to do with this. - As of today, the Kids Online Safety Act still has not passed. Mark Zuckerberg didn't just want scale and speed, he wanted financial flexibility. So Meta also enticed Wall Street Giants into a months long bidding war to finance the construction. The result was a joint venture, which left Meta with just a 20% stake in the campus.

5:37 The rest would be owned by the private capital firm, Blue Owl, backed by $27 billion in debt from asset managers including PIMCO. This structure kept debt off Meta's balance sheet while leaving it in charge of day-to-day operations. Richland Parish right now is a textbook boom town. Some will tell you they anticipate it's going to be a as big as New Orleans. Other fear it will be a ghost town. They want to know if those 300 to 500 jobs will be worth the disruption.

6:07 People are looking at their fields and rethinking what does it mean for the land and its production to shift from corn and cotton to data. And begging the question, what happens if the promises that have been made to them are broken or don't pan out.