AI Power Rush: Meta Bets $10B on Texas Data Center

According to Meta Platforms, the company has significantly expanded its investment in a new artificial intelligence (AI) data center in El Paso, Texas, increasing the budget from $1.5 billion to $10 billion—more than a sixfold rise—as it accelerates efforts to meet surging demand for computing power.

The facility is expected to deliver up to 1 gigawatt (GW) of computing capacity when it becomes operational in 2028, underscoring Meta’s aggressive push into AI infrastructure. Spanning approximately 1.2 million square feet, the project will employ over 4,000 construction workers at peak and create around 300 permanent jobs once operational.

Meta also announced plans to support the project with more than 5,000 megawatts (MW) of clean energy capacity and is working with nonprofit organizations to introduce new water sources, aiming to reduce pressure on local resources and position the facility as a sustainable addition to the community.

Originally launched in October 2024 with a budget of $1.5 billion, the expansion was disclosed by Vice President of Data Center Development Gary Demasi at the Borderplex Alliance annual summit. The move reflects Meta’s intensified strategy amid the global AI race, where major technology companies such as Alphabet, Amazon, and Microsoft continue to scale cloud and AI infrastructure investments.

In its latest financial outlook released in January, Meta projected annual capital expenditures of up to $135 billion, highlighting the unprecedented scale of its AI-related spending. However, unlike some peers, Meta does not operate a public cloud infrastructure business, making its capital allocation strategy a focal point for investors. The company’s stock has declined 16% year-to-date, including a 7% drop in a single trading session following recent legal setbacks related to content management on Facebook and Instagram.

Alongside increased AI investment, Meta is implementing cost-control measures. The company has confirmed layoffs affecting several hundred employees across divisions including Facebook, global operations, recruitment, sales, and virtual reality, as it reallocates resources toward AI development.

Meta currently operates around 30 data centers globally, with 26 located in the United States. The El Paso project will become its third facility in Texas. To support its growing infrastructure, the company has expanded partnerships with semiconductor leaders such as NVIDIA and AMD, and has become the first customer for next-generation data center processors from Arm. It has also introduced four upgraded versions of its in-house MTIA accelerators to enhance AI processing capabilities.

As AI data center expansion accelerates across the United States, projects are increasingly facing community concerns, particularly around water usage and rising energy costs. Previous reporting has highlighted similar challenges, including water shortages linked to earlier data center developments.

In response, Meta stated it is advancing eight water restoration initiatives in Texas and collaborating with nonprofit organization DigDeep to provide sustainable water systems to more than 100 households. The new data center will also incorporate liquid cooling and closed-loop water systems, with total water usage expected to be comparable to that of a typical local golf course, helping to mitigate environmental impact.