After many years of anticipation, private credit firms have landed a landmark deal: a $29 billion financing package for Meta Platforms’ massive Louisiana data center. Led by Pacific Investment Management Co. (PIMCO) and Blue Owl Capital, the transaction marks a key entry into the investment-grade debt market traditionally dominated by banks.
“This deal is one of the first of its kind for private credit and if it is successful, we would expect to see more,” said John Medina, senior VP at Moody’s Ratings.
Tech giants are engaged in an AI arms race requiring massive capital. Elon Musk’s xAI plans $18 billion in data center spending, while Amazon and OpenAI are building out U.S. facilities. Morgan Stanley estimates AI-related capital expenditures could top $3 trillion in three years.
For Facebook parent Meta, PIMCO is leading $26 billion in debt financing backed by the data center’s assets, while Blue Owl provides $3 billion in equity. Morgan Stanley is advising Meta on the deal, which faced intense competition from private credit heavyweights like Apollo, KKR, Brookfield, Blackstone, and Ares.
This deal dwarfs other AI data center financings, which typically fall below $10 billion. It also follows the largest recent bond sale—$26 billion for Mars Inc.’s acquisition of Kellanova.
Private credit firms hold about $450 billion of dry powder, eager to expand beyond acquisition financing and challenge Wall Street banks by entering investment-grade debt markets. Apollo estimates this could help private credit grow into a $40 trillion industry.
Michael Zawadzki, Blackstone’s credit CIO, described the investment-grade ecosystem as a “massive market with a huge tailwind.”
Blue Owl CEO Marc Lipschultz likened the AI boom to a modern Gold Rush, with data centers as the “picks and shovels” fueling growth.
“We are the best placed firm to help develop and to help fund those data centers,” Lipschultz said during a July 31 conference call.
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