Meta Taps Morgan Stanley, JPMorgan for New Data Center Deal

by Silas Brown, Aaron Weinman, Davide Scigliuzzo, Laura Benitez, Paula Seligson of Bloomberg News, 5/5/26

Meta Platforms Inc. is working on a financing package for a data center in El Paso, Texas, that could total roughly $13 billion, underscoring Big Tech’s growing reliance on debt to bankroll the infrastructure behind the AI boom.

Morgan Stanley and JPMorgan Chase & Co. are leading the process, according to people familiar with the matter. A large majority of the financing is expected to be in the form of debt, with the rest equity, the people said, asking not to be identified discussing private information.

Meta’s effort is similar to an almost $30 billion financing package it completed last year for a data center site in rural Louisiana. In that deal, which included $27 billion of debt, Meta raised the funding through an entity known as Beignet Investor LLC, named after the popular Louisiana pastry. This latest transaction, dubbed Sopaipilla, is named after a fried pastry popular in the southwestern US, the people said.

Representatives for Meta, Morgan Stanley and JPMorgan declined to comment. Discussions are still in the early stages and terms remain fluid, the people familiar with the talks said.

When Meta sealed Beignet’s deal, the company turned to Pacific Investment Management Co. as its anchor lender on the transaction. With Sopaipilla, Morgan Stanley and JPMorgan may offer the debt to investors in capital markets, the people said.

Since the Beignet transaction, data center financing has exploded across investment-grade and junk-bond markets.

The four biggest hyperscalers, which include Meta, are expected to spend as much as $725 billion this year on AI data center equipment and related capital, up from earlier forecasts.

To fund this rapid expansion, they are ramping up bond sales. On Tuesday, Alphabet Inc. launched its latest large-scale bond offering, just months after issuing nearly $32 billion across dollar, sterling, and Swiss franc markets. In the high-yield space, more than $20 billion of bonds and loans have launched in the past three weeks alone, while Meta itself raised $25 billion in bonds last week.

Investor appetite is beginning to show some signs of strain given roughly $300 billion in AI-related debt has already been sold, including project finance deals and unsecured bonds.

Meta is spending more than $10 billion on the data center in El Paso, which was a jump from prior projections, Bloomberg News reported in March.

The gigawatt-sized data center is expected to come online in 2028, and will support more than 300 on-site jobs once completed. Meta has also said its construction needs will grow given the increased investment, and now anticipates 4,000 temporary workers to be on site during the peak construction period.

There are some concerns over Meta’s outlook, however, as investors worry that the company’s investments in artificial intelligence won’t pay off. The company’s shares are down about 7.5% this year.

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Bloomberg News provided this article. For more articles like this please visit bloomberg.com.

Meta Taps Morgan Stanley, JPMorgan for New Data Center Deal

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