Meta started planning a $10 billion data center. Now the price tag is five times higher. The company is racing to build enough computing power for its AI ambitions, and Louisiana is offering generous tax breaks to keep the project growing. That tension between massive spending and uncertain returns is what investors are watching.
When Meta first announced the Hyperion data center, the capacity was set at 2 GW and the cost at $10 billion. In October, Meta partnered with Blue Owl Capital, which pushed the projected cost for the 2 GW facility from $10 billion to $27 billion. Meta's AI chief, Alexandr Wang, leads the Meta Superintelligence Labs, which has already released two major AI models. In a Facebook update, Meta's chief executive Mark Zuckerberg wrote that the supercluster would be "able to scale up to 5GW over several years."
Meta's Hyperion project qualified, and construction began in December 2024. "I'm a business guy," Landry told CNBC. "What we know is when you look at the overall comprehensive package here, it's in the black. For local government, and the state, and how you get to the bottom line is irrespective to me."
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In exchange, Meta has already awarded $1.6 billion in contracts to local businesses. The company also says it will invest $1 billion in local infrastructure - roads, water systems, and wastewater treatment.
Meta, together with Microsoft, Alphabet, and Amazon, is taking advantage of tax breaks and power purchase deals offered by states vying for a piece of the AI boom.
The Hyperion project is part of a wider wave of AI infrastructure spending. Meta's joint venture with Blue Owl Capital allows it to share the financial burden while scaling capacity. These capital-intensive data centers require enormous upfront investment, and states like Louisiana are offering tax breaks to attract them, betting that the long-term economic benefits will outweigh the short-term revenue loss. The race to build AI computing power is intensifying, with Meta, Microsoft, Alphabet, and Amazon all pouring billions into new facilities.
Meta has significantly increased its capital expenditure forecast for 2025, with a large portion directed towards AI infrastructure. The Hyperion project is just one of several massive data centers the company is developing worldwide, as it competes with rivals like Microsoft, Google, and Amazon to dominate the rapidly growing AI market. These investments carry substantial risk, but Zuckerberg has repeatedly emphasized the strategic importance of having sufficient compute capacity to train and deploy next-generation AI models.
Shareholders are eager for Meta to demonstrate financial gains from its enormous AI spending. The full completion date for the 5 GW Hyperion project remains unknown.
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