Meta Invests Another $1.5bn in Texas Data Center, Marking Third Major Bet; CEO: Better to Overrun Than to Fall Behind

TradingKey - Social media and technology giant Meta announced on Wednesday that it will invest over $1.5 billion to build a new data center in El Paso, Texas. This represents the latest in a series of major infrastructure investments the company is making to advance its artificial intelligence (AI) ambitions and maintain its leadership position in the fiercely competitive AI industry.

According to Meta's official blog, the data center is designed to eventually reach a capacity of 1 gigawatt (GW), making it one of the largest planned data center campuses in the United States. The 1 GW power capacity is vividly described as "enough to power a city the size of San Francisco for an entire day."

Company spokespersons stated that the data center is expected to become operational in 2028, with power capacity sufficient to support the intensive operation of high-end AI computing chips, providing core computational infrastructure for Meta's various AI projects. Upon completion, Meta's total number of operational data centers globally will increase to 29, with three located in Texas.

Meta has committed that the data center will be powered 100% by renewable energy. It plans to integrate a closed-loop liquid cooling system that will achieve zero water usage for most of the year, contributing to the company's broader water conservation goals by 2030.

This $1.5 billion investment is part of Meta's continued deepening presence in Texas, with the company revealing that its cumulative investment in the state has exceeded $10 billion, and it employs more than 2,500 people.

"The fastest gazelle finds their place, others follow, and Meta is the fastest gazelle in the industry, as far as I'm concerned," Jon Barela, CEO of the Borderplex Alliance, a local economic development and policy advocacy group involved in facilitating the project, said. "We've had others look at the region, other data centers, and we expect there probably to be others that will want to follow."

Artificial intelligence has become Meta's core strategic focus. The company uses AI technology to power its chatbot products and optimize content recommendations (including videos and ads) on Instagram and Facebook platforms. CEO Mark Zuckerberg has repeatedly emphasized the immense potential of personal AI assistants, calling them "one of the most important and valuable services of the future."

To support this strategy, Meta is investing in AI infrastructure at an unprecedented scale. The company expects its total capital expenditure for this year to reach as high as $72 billion, with a significant portion dedicated to AI-related infrastructure.

Mark Zuckerberg believes it's better to "overspend than underspend" in the AI field, “There’s a meaningful chance that a lot of the companies are overbuilding now,” he said. “But on the flip side, I actually think all the companies that are investing are making a rational decision, because the downside of being behind is that you’re out of position for, like, the most important technology for the next 10 to 15 years.”

Additionally, semiconductor technology provider Arm announced the same day that it has extended its partnership with Meta, reaching a multi-year agreement to deepen joint hardware and software design. Under the agreement, Meta will use Arm's Neoverse blueprint to develop data center chips that deliver better performance and lower power consumption compared to Intel-based competitors, further strengthening Meta's competitive advantage in AI computing efficiency.