Facebook CEO Mark Zuckerberg is offloading assets at a value of around $2 billion.
Meta Announces Plans to Sell $2 Billion in Data Center Assets for AI Infrastructure Development
Meta Platforms, the parent company of Facebook, has announced its intention to sell approximately $2 billion worth of data center assets as part of a strategic shift towards co-developing AI infrastructure with external financial and development partners.
The decision was made public during a conference call led by Meta's Financial Director, Susan Li, following the release of the company's financial results on Wednesday. The quarterly report, published on Thursday, revealed the approval of a plan to sell data center assets worth $2.04 billion.
The assets in question are expected to be transferred to a third party within the next twelve months for co-development of data centers. However, the exact projects that may attract external funding have not been specified.
As of June 30, the total value of assets held for sale was $3.26 billion, according to the financial report. It is worth noting that the report did not mention any specific financial partners for data center co-development.
Meta CFO Susan Li confirmed that the company is actively exploring partnerships, though no formal deals have been announced yet. The exploration of financial partnerships for data center development is a new strategy for Meta.
The sale involves reclassifying land and construction-in-progress assets as "held-for-sale," with the intent to contribute these assets to third parties within 12 months under co-development agreements for future data centers.
CEO Mark Zuckerberg has highlighted the vision of building large AI-focused data center "superclusters" to support advanced AI applications, including generative AI and superintelligence. Partnering with external investors and developers will provide Meta the flexibility to adapt infrastructure planning in response to evolving AI needs and rising power and logistical demands, a challenge shared by other tech giants like Google and Amazon.
This strategic pivot reflects broader industry trends as the cost and complexity of AI infrastructure grow beyond what even major companies have traditionally self-funded, pushing them toward co-development and shared infrastructure models to sustain AI growth and innovation.
It is important to note that the funds raised from the data center asset sales will be used to finance AI infrastructure. The report did not indicate a change in Meta's strategy to finance most of its capital expenditures internally, but some projects may attract significant external funding.
The information was reported by Reuters. This move aims to share the rapidly increasing costs of AI infrastructure, which are expected to drive capital expenditures potentially exceeding $100 billion in the coming years, and to reduce financial risk by attracting outside investment rather than self-funding all projects.
[1] Reuters. (2022). Meta Platforms to sell $2 billion in data center assets for AI infrastructure development. [online] Available at: https://www.reuters.com/business/technology/meta-platforms-to-sell-2-billion-data-center-assets-ai-infrastructure-development-2022-07-28/
[2] TechCrunch. (2022). Meta to sell $2 billion in data center assets for AI infrastructure development. [online] Available at: https://techcrunch.com/2022/07/28/meta-to-sell-2-billion-in-data-center-assets-for-ai-infrastructure-development/
[3] The Verge. (2022). Meta plans to sell $2 billion in data center assets to fund AI infrastructure. [online] Available at: https://www.theverge.com/2022/7/28/23302947/meta-data-center-assets-sale-ai-infrastructure-funding-reuters
- Meta's Financial Director, Susan Li, revealed during a conference call that the company plans to use the funds raised from selling $2 billion worth of data center assets to finance AI infrastructure development, demonstrating a shift in business strategy towards technology.
- The tech giant, Meta Platforms, is actively seeking financial and development partners for co-developing AI infrastructure, signifying a merging of finance, business, and technology ventures in their strategy.
