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Meta convinces Blue Owl to cut $30B check for its Hyperion AI super cluster
- dom96 11mo agoMeta has plenty of money, why do they need private equity to fund this?
- consumer451 11mo agoIsn't the first rule of business that you spend other people's money, whenever possible?
- onlyrealcuzzo 11mo agoAnother #1 is to get a good return on your money. But tech companies horde cash because they don't have anywhere they see as a good investment. You'd think investing in their own data centers would get a better return than cash. Kind of makes you wonder why everyone is so eager to fund these projects for them.
- nextworddev 11mo agoBecause that’s the only place with growth
- consumer451 11mo agoSometimes the simplest point makes the most sense about a complex topic. Kudos for being very succinct. I believe the youths would have just replied: "this." :~>
- aorloff 11mo agoTheoretically, tech companies valuations are based on the notion that the best place for them to invest money is internally, that their internal flywheel is the absolute highest return on capital. Practically speaking, they also need to build data centers, and real estate has more pedestrian (returns and) valuations, even when it houses fantastical uber tech.
- consumer451 11mo agoGood points, but after processing other replies in this post, I would change the last sentence to: Is Meta so unsure about this investment, that they decided to spread the risk and profit to other parties, even though they could fund it themselves? (AI bubble death knell ?)
- grugagag 11mo agoDump risk on others
- Ekaros 11mo agoMake the numbers look better? There must be benefits of moving these numbers from column to some other column. Or even partially hiding them. Thus allowing stock to be priced higher based on some metric...
- halayli 11mo agoif you have $100M and you need a $1M, you'd use your credit line and borrow $1M and pay it back from interests coming from $100M. it's not that different in corp.
- jstanley 11mo agoThat doesn't make any sense. You'll be paying a higher rate of interest on your loan than you're receiving on your cash. You'd be better off taking the $1m directly out of your cash pile.
- halayli 11mo agoYou need to consider secured line of credit vs unsecured and the interest rate is significantly different as one is backed by collateral and the other is not.
- deleted 11mo ago[deleted]
- binarymax 11mo agoNot necessarily. You can get an interest rate lower than your investment return rate.
- YokoZar 11mo agoWhen interest rates were particularly low years ago, we saw a large number of companies issuing bonds and then using the money to just do stock buybacks.
- _heimdall 11mo agoThat depends heavily on the terms of the loan you can secure and how you choose to invest the cash. When you borrow $1M against $100M in cash or assets its generally considered a very low risk loan, meaning you'll likely get good terms and comparatively low rates.
- SoftTalker 11mo ago> structured in such a way as to keep the debt off of the Social Network's balance sheets
- nradov 11mo agoThe article is poorly written. This deal is mostly debt financing with only a little bit of equity. In terms of corporate capital structure, shareholder returns are usually maximized by taking on at least some debt (leverage). The precise optimal proportion of debt depends on several factors, particularly credit rating.
- nickpsecurity 11mo agoPeople wanted massive investments in the electric grid. Thanks to AI boom, that's finally happening. Except, they're also going to be massively using the electric grid. Maybe we'll be blessed by AI companies making money but staying under usage projections. Then, those areas have more power.
- boulos 11mo agoThe Bloomberg source is more informative with respect to the financing (https://archive.ph/5WGcA https://archive.ph/5WGcA) > Blue Owl Capital Inc. and Meta will split ownership of the Hyperion data center site in Richland Parish, Louisiana, with the tech giant retaining just 20% of it, according to people with knowledge of the matter. To finance the build-out, Morgan Stanley arranged over $27 billion of debt and about $2.5 billion of equity into a special purpose vehicle At 225 over (current?) treasuries: > The bonds priced at about 225 basis points over Treasuries,
- Forgeties79 11mo agoThe sums being thrown around right now are just staggering. All the money that is being leveraged for AI these days is going to absolutely crush some unlucky sods somewhere. All these massive deals can’t all succeed. Louisiana residents better expect higher energy costs soon as well that’s for sure. No way entergy is content eating the costs of these investments and the state basically has an allergy to taxing or in any way financially inconveniencing companies. The way things typically go in LA the only guarantee is the residents will be on the losing end in some form or fashion (also many politicians are probably skimming off plenty for themselves and their buddies). Especially with Landry at the helm.
- neilv 11mo agoIf it doesn't pay off, and becomes just a warehouse space with outdated computers in a few years, who takes the financial hit? (Meta? Blue Owl Capital's institutional investors? Blue Owl Capital's private investors?)
- neilv 11mo agoIf this data center in Richland Parish, Louisiana, is full of obsolete hardware in a few years, do they just wait for the next hurricane, open all the doors and windows, and phone the insurance company with the bad news?
- master_crab 11mo agoWould love to see the business plan that convinced Blue Owl to sink that much money. Or maybe they’re ok with the collateral on offer.
- sottol 11mo ago$30B ... 2GW datacenter ... ??? ... AGI
- mlnj 11mo agoEveryone is very silent on AGI in the past months. The latest from AI is better targeted ads and better adult content didn't you hear?
- erichocean 11mo agoI don't know about AGI, but AI employees replacing human labor is well within range today.
- mlnj 11mo agoExcel sheets have replaced many humans too. Pretty low bar for AGI if you'd ask me.
- erichocean 11mo agoNot replaced, made more efficient—the "replacement" is indirect. Actual replacement involves no human in the loop, an entire firm that is 100% AI labor is possible.
- temp0826 11mo agoIf I was going to start a shitcoin scam I'd call it AGI
- Mountain_Skies 11mo agoToo much money chasing too few investment opportunities with large potential returns. Risk really isn't being acknowledged these days.
- Ekaros 11mo agoDebt financed. Who is loaning money to these things? I feel there must be an other level of bubble there...
- mcoliver 11mo agoHence the big push currently ongoing to allow 401ks to invest in private markets
- victorbjorklund 11mo agoWouldnt that be pocket change?
- googlywoogly 11mo agoThe exact value of all 401k isn't really known, but the average account value is estimated at ~135k, if (let's say) 200 million Americans have a 401k, that comes out to 27 trillion.
- FanaHOVA 11mo agoYou really think the amount of savings in 401ks is the same size as the GDP of the whole country?
- dmoy 11mo agoIt's not, but IRA plus 401k is about equal to GDP, yes (and if you add approximately equivalent defined contribution plans like 403b, tsp, etc, then it's more than GDP)
- consumer451 11mo ago> It's not, but IRA plus 401k is about equal to GDP The economic vampires must salivate about this opportunity all night and day.
- pcurve 11mo agoThis article doesn't mention it, but PIMCO is lead lender "Pacific Investment Management Co. (PIMCO) is the anchor lender on the deal. The debt, which matures in 2049, is fully amortising and has been rated A+ by S&P. The bonds were priced at around 225 basis points over U.S. Treasuries." https://pe-insights.com/blue-owl-and-meta-close-record-30bn-financing-for-ai-data-centre-expansion-in-louisiana/ https://pe-insights.com/blue-owl-and-meta-close-record-30bn-... Oof.. I don't know about this one.
- rsynnott 11mo agoOh, we're doing this again, are we? Ugh. A year ago, I was (a) fairly confident that the AI bubble would burst, but (b) fairly confident that contagion would be limited; a bunch of startups would evaporate, and some VCs would be badly burned or fail, but the broader economy would largely shrug and carry on. Based on this sort of thing, I'm not sure I still believe (b).
- pcurve 11mo agoWhat I find fascinating is, everyone is making the same exact points: 1. Yes, there is a bubble, but it's not the same. Companies are profitable. 2. It may burst, but this may go on for another 2+ years. No one knows. 3. Even after the burst, we would have valuable AI infrastructure, just like all the excess internet capacities after the Dotcom. Base on this, I think the bubble will burst sooner. Sentiment can shift real quick.
- lazide 11mo agoPimco - the company that originated all those bonds every pension fund is sitting on.
- deleted 11mo ago[deleted]
- consumer451 11mo agoI am 99.0% percent sure that the AI bubble burst is coming. I was only 95% sure until very recently. Does this mean that this investment spreads the bubble burst risk into people's pension funds? (those lucky enough to have such a thing) Or, not necessarily?
- chiph 11mo agoIs there enough power in the nearby parishes to supply 2.2GW? Also - will there be enough skilled labor?
- perihelions 11mo ago> "As we learned in December, Meta has commissioned a new natural gas generator plant to be built by local utility operator Entergy. At least for the initial build out, the gas plant would employ three combined cycle combustion turbine generators with a total generative capacity of over 2.2 gigawatts."
- fishmicrowaver 11mo agoNope, they're not betting on connecting to the grid. They're going to burn natural gas / shale oil.
- alchemist1e9 11mo agoAre the design specifications, like interconnect, GPUs, CPUs, memory and storage of this new cluster public? I seem to recall xAI has made public theirs. I’m mostly asking out of curiosity and a desire to read up on the SOTA hardware specs being used. EDIT: this has some interesting details — https://www.adwaitx.com/meta-prometheus-ai-cluster/ https://www.adwaitx.com/meta-prometheus-ai-cluster/ I assume eventually all this investment should result in price drops for cloud GPU rates. Maybe somebody has setup an automated rate aggregator and collected the data? It would be interesting to see the historical data and monitor the changes, like dollars per TFLOP/hr or something standardized to track over time like other economic data or prices. EDIT: this is along the lines and pretty interesting — https://www.unitedcompute.ai/gpu-price-tracker https://www.unitedcompute.ai/gpu-price-tracker I know I’m mixing two different thoughts but they are connected in my head for entrepreneurs interested in starting independent tech/AI/LLM businesses needing heavy compute infrastructure.
- nextworddev 11mo agoIt’s complicated. Old GPUs (ex hopper, A100) prices has been dropping but the new ones will go up.. so yes it doesn’t need to crash for you to have cheaper gpus
- 1123581321 11mo agoA little more detail in the linked Bloomberg report. https://archive.ph/2025.10.18-043843/https://www.bloomberg.com/news/articles/2025-10-16/blue-owl-seals-largest-private-capital-deal-for-meta-s-ai-growth https://archive.ph/2025.10.18-043843/https://www.bloomberg.c...