Meta has announced a significant increase in its investment for a new AI data center in El Paso, Texas, raising its commitment from $1.5 billion to $10 billion, a more than sixfold boost, with the goal of reaching 1 gigawatt of capacity by 2028 [1]. The 1.2-million-square-foot facility, which broke ground in October, is expected to create 300 new jobs and employ over 4,000 construction workers at its peak [1]. Meta also pledged to add over 5,000 megawatts of clean power to the grid and address local water concerns by partnering with specialized nonprofits to bring fresh water to the area [1].
The company is ramping up its AI infrastructure spending to meet what it describes as unprecedented and soaring demand for computing resources, with capital expenditures projected to reach up to $135 billion in 2026 according to its January earnings report [1]. Despite this aggressive investment, Meta's stock has faced pressure, dropping 16% year-to-date and falling 7% on Thursday following two court defeats related to content moderation issues on Facebook and Instagram [1]. Wall Street is scrutinizing Meta's spending, particularly because, unlike Google, Amazon, and Microsoft, Meta does not operate a cloud infrastructure business [1].
Meta is simultaneously cutting costs in other areas, confirming hundreds of layoffs across Facebook, global operations, recruiting, sales, and its virtual reality division [1]. Nevertheless, its data center expansion continues, with 30 facilities in total, 26 of which are in the U.S., and El Paso marking its third Texas site [1]. The company is also investing heavily in chips and systems, having signed major deals with Nvidia and Advanced Micro Devices in February, and recently becoming the first customer for Arm's new data center processor [1]. Meta unveiled four new versions of its in-house MTIA accelerators this week, continuing its push for AI hardware innovation [1].
As AI data centers proliferate across the U.S., concerns have arisen among local residents about water availability and rising electricity costs. The New York Times reported that taps ran dry in a Georgia county after Meta broke ground on a $750 million data center there in 2018, highlighting ongoing community backlash to such projects [1].
CONCLUSION
Meta's $10 billion investment in its El Paso AI data center underscores its commitment to scaling AI infrastructure amid soaring demand, despite mounting scrutiny from Wall Street and local communities. The company's aggressive capital spending and partnerships with leading chipmakers signal a high-impact move for the tech sector, but ongoing stock declines and community concerns may temper investor enthusiasm.