Meta Platforms’ (META) auditor Ernst & Young raised a red flag over the social media giant’s decision to keep a $27B data center project off its balance sheet, according to The Wall Street Journal.
Although the auditor eventually signed off on the decision, it still highlighted the move as a “critical audit matter,” the report said. The project, dubbed Hyperion, was relocated into a new joint venture with Blue Owl Capital. Meta owns 20% of the venture, while funds managed by Blue Owl constitute the rest. Since Meta is not the “primary beneficiary” of this project, it did not find it necessary to include it on its balance sheet.
Ernst and Young said the decision “was especially challenging due to the significant judgment required in determining the activities that most significantly affect the VIE’s economic performance,” the report said.
U.S. Senator Elizabeth Warren (D-Mass.) and three other senators sent a letter to U.S. Treasury Secretary Scott Bessent in late January. They asked Bessent to investigate the risks to the overall financial system due to AI-related debt, the report said. They specifically pointed out the Blue Owl and Meta joint venture.
The Hyperion data center is a massive project being constructed in rural, northeastern Louisiana. It is designed to provide 2 gigawatts of capacity with the potential to scale up to 5 GW. The 4-million-square-foot facility will be located on more than 2,200 acres.
“We are proud to be part of the Richland Parish community, and we look forward to continuing to strengthen our partnership for years to come,” said Rachel Peterson, Meta’s vice president of data centers. “Construction is well underway with thousands of construction workers on site, and, once online, the project will support over 500 operational jobs.”
“Our AI ambitions will be realized through our ability to deliver the infrastructure to support it,” added Meta Chief Financial Officer Susan Li. “Our partnership with Blue Owl Capital to develop the Hyperion Data Center is a bold step forward—combining Meta’s deep expertise in building and operating world-class data centers with Blue Owl’s strength in infrastructure investment.”