Meta (META) Stock Slides Nearly 8% Following Surge in Its Massive Texas AI Investment to $10 Billion

TLDRs;

• Meta significantly increased its investment in an El Paso AI data center, leading to investor concerns about rising capital expenditures.
• The $10 billion project is intended to provide 1GW of capacity and expand Meta’s long-term AI infrastructure.
• Discussions regarding energy sources, including the potential use of natural gas, are drawing attention from local communities and regulatory bodies.
• While expanding its AI capabilities, Meta is simultaneously implementing cost-saving measures across various departments while managing substantial infrastructure investments.

(SeaPRwire) –   Meta Platforms (META) experienced a stock decline of nearly 8% following a substantial increase in its planned investment for a significant AI data center project in El Paso, Texas. The project, initially projected at $1.5 billion, has now escalated to a $10 billion commitment, indicating a more ambitious expansion into artificial intelligence infrastructure than investors had anticipated.

The facility, slated for operation in 2028, is designed to offer up to 1 gigawatt of computing power. While this expansion bolsters Meta’s long-term standing in the AI sector, the market reacted negatively to the magnitude and cost of the investment surge, viewing it as a considerable increase in capital spending pressure.

Texas AI Hub Sees Rapid Growth

The El Paso site is poised to become a crucial infrastructure hub for Meta within the United States. The company has stated that the project will create approximately 300 permanent jobs upon completion and will require over 4,000 construction workers during its peak development phases.

Meta Platforms, Inc., META

Meta currently operates 30 data centers globally, with several more under construction. The Texas facility will be its third in the state. The company highlighted that this expansion is driven by the increasing demand for AI computing power, as advanced models and services necessitate more energy-intensive infrastructure.

However, the scale of this investment has raised investor concerns regarding long-term profitability, particularly since Meta does not operate a dedicated cloud computing business to offset infrastructure expenses.

Clean Energy Commitments Under Scrutiny

Meta has emphasized its dedication to sustainability, asserting that the El Paso facility’s electricity consumption will be matched by 100% renewable energy sources. The company also intends to add over 5,000 megawatts of clean power capacity to the regional grid and implement a closed-loop liquid cooling system to conserve water.

Despite these assurances, the plans for energy sourcing have generated controversy. Local utility filings suggest that El Paso Electric is seeking approval for a 366-megawatt natural gas plant, which could be directly linked to the data center for several years. This proposal has faced criticism from community members who believe it contradicts earlier discussions focused on renewable energy commitments.

Meta will spend more than $10 billion to develop a data center in El Paso, Texas, a jump from prior projections and the latest in a series of major investments focused on the infrastructure needed to support its AI ambitions https://t.co/x3RCoTwLgR

— Bloomberg (@business) March 26, 2026

Meta is also supporting eight water-related initiatives in Texas, including collaborations with non-profit organizations focused on water access and conservation. Nevertheless, questions persist regarding the environmental trade-offs associated with developing such a large-scale AI infrastructure project.

Increasing Costs and Local Opposition

The broader economic and political landscape surrounding the project is also becoming more intricate. Reports indicate that Meta’s data center will benefit from substantial tax incentives, including an estimated 80% property tax abatement over 35 years, prompting inquiries about long-term public value.

Concurrently, Meta is reportedly implementing cost reductions in other areas of its business, with layoffs affecting its recruiting, sales, global operations, and virtual reality divisions. This contrast between aggressive infrastructure spending and internal cost-cutting measures has contributed to investor uncertainty.

The situation in El Paso mirrors a wider trend: communities across the United States are increasingly scrutinizing large-scale data center projects due to their significant energy and water demands, as well as their reliance on local infrastructure. As regulatory oversight intensifies, analysts caution that project timelines and costs may continue to escalate.