Meta Platforms has dramatically increased its investment in a Texas-based AI data center from an initial $1.5 billion to $10 billion, a more than sixfold jump announced at the annual Borderplex Alliance summit in El Paso by Gary Demasi, Meta’s VP of data center development. The 1.2 million square foot facility, which began construction in October 2024, is targeting 1 gigawatt of capacity and is expected to open in 2028. It will be Meta's third data center in Texas and is projected to support over 4,000 construction workers at peak and create 300 permanent operational jobs.
The massive infrastructure spend is part of Meta's broader capital expenditure guidance for 2025, which stands at up to $135 billion, positioning the company among the largest spenders in the current AI infrastructure buildout. To support its energy needs and address environmental concerns, Meta has contracted projects to add over 5,000 megawatts of clean energy to the Texas grid and is running eight water restoration projects in the state, including a partnership with nonprofit DigDeep. The new facility will utilize a closed-loop liquid cooling system designed to recycle water.
This aggressive spending surge is occurring alongside significant headwinds for the social media giant. Meta's stock (META) fell 8% on Thursday, March 27, 2026, following two separate court verdicts in New Mexico and Los Angeles that found the company liable for harm to young users, including a $375 million fine. The rulings have raised Wall Street concerns about potential changes to the design practices behind Meta's core advertising business. The selloff continued into Friday, with shares dropping an additional 3%, bringing the total decline to 12% over five trading sessions and a 17% drop year-to-date.
Analysts note the legal landscape poses a deeper risk. JP Morgan analyst Doug Anmuth suggested the rulings could be compared to those against Big Tobacco in the 1990s, warning that the "noise could keep Meta shares under pressure." The company is appealing the decisions, but the precedent could expose it to a growing wave of litigation targeting platform design.
Compounding investor anxiety is Meta's lack of a cloud infrastructure business—unlike peers Google, Amazon, and Microsoft—to offset its heavy AI spending. This has drawn extra scrutiny as the company's free cash flow is projected to plummet to $6.25 billion in 2026 from $43.80 billion in 2025, according to FactSet data. Oppenheimer analyst Jason Helfstein stated the market may see Meta as "range bound until a competitive new model is launched or more clarity [comes] around free cash flow."
Amidst this spending and legal turmoil, Meta confirmed hundreds of layoffs across multiple teams including Facebook, global operations, recruiting, sales, and its virtual reality division on Wednesday, March 26.
