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Meta aims to raise $2 billion to fund artificial intelligence for the All-In Push, relying on private capital companies to cover builds from US data centers.
Consultations between Instagram owners and private credit investors are progressing, and large players like Apollo Global Management, KKR, Brookfield, Carlyle and Pimco are involved in the discussion, according to those familiar with the issue.
Meta hopes to raise $3 billion in stock from them and raise another $26 billion in debt. However, it considers options for what will become one of the biggest private funding of this kind, so it discusses how to build a massive debt raise. The company could also try to raise more capital, one added.
When partnering with big money managers, Meta and its biggest rivals split the risks and costs of large investments as they compete to ensure computing capabilities to enhance their AI models.
Meta had worked with an advisor to Morgan Stanley to arrange funding, but was considering ways to make it easier to trade debts when they issue them. This is one of the factors that potential investors who studied the transaction have raised, taking into account its size.
Meta, Morgan Stanley, Apollo, Brookfield, Carlisle, KKR and Pimco all declined to comment.
Meta Chief Executive Mark Zuckerberg has been rapidly increasing his efforts this year to become an “AI leader” as the company’s development slows its rivals. That large-scale language model for llama 4 is not running as expected, and the release of the flagship “Behemoth” model is delayed.
Earlier this month, Meta announced a $15 billion investment in data labeling for startup Scaleai. As part of the deal, the social media group is hiring scale CEO Alexandre Wang to its new “super intelligence” team, tasked with developing artificial general information.
Zuckerberg is personally trying to poach other AI talents, and three top Openai researchers announced this week that they are joining the company. Openai CEO Sam Altman said on a podcast that Zuckerberg is offering engineers a $100 million sign-on bonus.
In May revenue, Meta increased its full-year capital expenditure forecast by 10% from $640 billion to $720 billion. He cited “additional data center investments” and “expected increase in infrastructure hardware” to support AI push.
This month it announced it had agreed to promote AI efforts to produce Illinois nuclear power plants for 20 years, marking four deals: the first nuclear deal and clean energy pack infrastructure.
The private capital company is also stepping up to raise funds for Openai’s data centers, and Blue Owl has agreed to help build a development in Texas with a $15 billion joint venture.
Openai works with investors such as SoftBank and Oracle on its $500 million data center venture.
Blue chip companies such as Meta are increasingly relying on private investment companies for firepower as they try not to strain their own balance sheets to fund large capital projects.
Apollo signed a $1.1 billion deal with Intel last year to fund the Irish chipmaker’s semiconductor manufacturing plant in exchange for stakes in the unit, ensuring cash flow from the business.
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Private investment groups are increasingly promoting investment grade companies for alternative financing for traditional corporate bonds or loans.
Such transactions, including Intel transactions, are often constituted as special purpose vehicles or joint ventures where asset managers acquire a large minority share in the vehicle. We donate assets to the venture in exchange for capital (either liabilities or stocks) provided by private investment companies.
The transaction is highly structured and has income and cash flow from projects split between the asset manager and the company. Companies benefit from fundraising in important ways. The transaction is structured to maintain debt-like financing from the balance sheet, avoiding leverage and valuation impact.
Asset managers such as Apollo and Blackstone own or affiliated with major insurance companies and pension providers that require high-quality regulator-approved investments. They turned to financing these bespoke orders to generate higher revenue than government and corporate bonds provide.
