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Meta Platforms is gearing up to raise an unprecedented $29 billion from private capital sources to support its ambitious artificial intelligence (AI) initiatives, particularly through the expansion of its U.S.-based data center infrastructure. The tech giant, which owns Instagram and Facebook, is actively negotiating with major investment firms to secure both equity and debt financing in what could become one of the largest private funding rounds in the AI infrastructure space.
I. Meta’s AI Push and Funding Objectives
1. Multi-Billion-Dollar Fundraising Plan
Meta is pursuing a two-part capital infusion—seeking $3 billion in equity and a further $26 billion in debt—from some of the world’s leading private credit investors. According to individuals close to the matter, discussions are ongoing with Apollo Global Management, Brookfield, Carlyle, KKR, and Pimco. While the structure of the debt component is still under review, the company is exploring ways to make the resulting instruments easier to trade in secondary markets, a key concern for potential backers due to the size of the offering.
2. Role of Morgan Stanley in Structuring the Deal
Morgan Stanley, one of Meta’s long-time banking partners, is advising on the transaction. Sources familiar with the talks suggest that the financial institution is helping Meta navigate the complexities of issuing a record-setting private debt instrument. Among the ideas under discussion are structures that would give Meta the flexibility to raise even more than the initially planned $29 billion, depending on market appetite.
II. Strategic Rationale: Scaling AI Capacity Through Partnerships
1. Sharing Infrastructure Risk with Investment Firms
By collaborating with private credit funds, Meta is seeking to distribute the financial burden of building out vast AI infrastructure. This strategy mirrors a broader trend among major tech companies, including OpenAI and Intel, to secure alternative funding to manage the costs and risks of capital-intensive projects. These deals allow tech giants to preserve their balance sheets while gaining rapid access to critical infrastructure for AI model training and deployment.
2. Meeting Rising Infrastructure Demands
The company’s AI ambitions require enormous computing power and storage capabilities. To meet these growing needs, Meta has dramatically increased its capital expenditure plans. In its May earnings call, the company raised its annual capex guidance by up to 10%, forecasting spending between $64 billion and $72 billion. The increase reflects higher projected costs for infrastructure hardware and additional data center investments crucial to AI growth.
III. Meta’s Recent AI Moves and Market Position
1. Investment in ScaleAI and Formation of New AI Team
Earlier this month, Meta announced a $15 billion investment in ScaleAI, a startup specializing in data annotation. Alongside the investment, Meta hired ScaleAI’s CEO Alexandr Wang to lead a newly created “superintelligence” team focused on developing artificial general intelligence (AGI). This move reflects Meta’s intention to play a leading role in shaping the next generation of AI systems.
2. Recruitment of High-Profile Talent
Meta CEO Mark Zuckerberg has also taken a hands-on approach in luring top-tier AI researchers. Reports indicate that several high-ranking researchers from OpenAI have recently joined Meta, enticed by highly competitive compensation packages—some reportedly offering sign-on bonuses as high as $100 million. These high-stakes hiring tactics underscore Meta’s urgency in bridging the perceived innovation gap with rivals like OpenAI and Google.
IV. The Competitive Landscape and Industry-Wide Trends
1. Meta Lags Behind in Generative AI Arms Race
Despite its heavy investments, Meta has fallen behind in generative AI performance compared to leaders like OpenAI and Google. The company’s Llama 4 large language model has underwhelmed expectations, and the release of its next-gen model, known internally as “Behemoth,” has been delayed. These setbacks have raised concerns about Meta’s ability to compete at the cutting edge of AI development.
2. Nuclear Energy and Clean Power Deals
To power its energy-hungry AI operations, Meta has been aggressively securing long-term electricity deals. Most notably, it recently agreed to purchase the full output of a nuclear plant in Illinois for 20 years—its first such deal. In addition, the company has entered into four agreements with clean energy provider Invenergy, reinforcing its commitment to sustainable infrastructure development.
V. Private Capital as a Funding Solution
1. Growing Trend Among Tech Giants
Meta’s turn to private capital is part of a larger pattern, where tech firms are increasingly leveraging non-traditional financing to support big-ticket infrastructure builds. In a parallel development, OpenAI secured backing from Blue Owl to fund a $15 billion data center project in Texas. OpenAI is also working with SoftBank and Oracle on a proposed $500 billion infrastructure venture aimed at advancing global AI capabilities.
2. Precedents in Semiconductor and Tech Infrastructure
This isn’t the first time major private equity players have helped finance tech infrastructure. Last year, Apollo struck an $11 billion agreement with Intel to help fund semiconductor fabrication facilities in Ireland. In return, Apollo received a minority stake in a dedicated unit, along with guaranteed cash flows. These models offer blue-chip tech companies like Meta a viable alternative to issuing traditional corporate debt or equity, especially when faced with massive upfront investment needs.
Conclusion
Meta’s proposed $29 billion private fundraising effort represents a pivotal moment in the race to dominate AI infrastructure. As the company strives to catch up with industry leaders and bring powerful models like Llama and Behemoth to market, it is leveraging strategic partnerships with heavyweight private capital firms to accelerate its infrastructure rollout. With the backing of institutional investors and renewed focus on acquiring talent and compute capacity, Meta is positioning itself to be a central player in the AI revolution. However, whether this ambitious plan delivers a sustainable edge remains to be seen in a rapidly evolving and fiercely competitive landscape.
