Meta’s massive data center project in Louisiana is set to cost more than $50 billion, but the tech giant is also benefiting from a major tax incentive given by the state as it races to expand its artificial intelligence infrastructure.
In late 2024, Louisiana Governor Jeff Landry signed a law offering a 20-year sales tax exemption to data centers built before 2029. This was part of the state’s effort to attract Meta and secure a share of the growing AI investment boom.
“I’m a business guy,” Landry told CNBC in an interview last year. “What we know is when you look at the overall comprehensive package here, it’s in the black.”
Landry said the wider economic benefits for local and state governments mattered more than how the final numbers were structured.
Louisiana is not alone in offering incentives. As Big Tech spends hundreds of billions of dollars on AI infrastructure, states are using tax rebates and energy deals to attract projects from Meta, Microsoft, Alphabet and Amazon.
Meta’s Louisiana project has doubled in cost
Meta said Monday that its Hyperion data center in Richland Parish will now be a 5-gigawatt facility and cost more than $50 billion. It will be the company’s largest data center.
The new figure is sharply higher than the $27 billion valuation disclosed in October, when Meta and Blue Owl Capital formed a joint venture to help build and manage the site. At the time, the facility was planned as a 2GW data center.
The project’s estimated cost was just $10 billion when construction began in December 2024.
About six months later, Meta CEO Mark Zuckerberg said Hyperion would be able to scale to 5GW over several years.
Meta says consumers will not pay infrastructure costs
The company said it will cover the full cost of energy, water and other infrastructure used by the data center.
Meta said consumers “aren’t paying the cost” of the facility’s energy, water and related infrastructure.
The company also plans to invest more than $1 billion in local infrastructure, including roads, water and wastewater systems.
Since construction began, local businesses have received more than $1.6 billion in contracts from Meta, according to the company.
Meta races to build more AI computing power
The expansion comes as Meta spends heavily to build enough computing infrastructure to support its AI ambitions.
Unlike traditional data centers, AI superclusters such as Hyperion are packed with graphics processing units and advanced hardware designed to handle AI workloads.
“Meta Superintelligence Labs will have industry-leading levels of compute and by far the greatest compute per researcher,” Zuckerberg wrote earlier.
The announcement also follows Meta’s best week on the stock market since early 2024 after the company released two major AI models under AI chief Alexandr Wang, who heads Meta Superintelligence Labs.
Investors are increasingly watching for signs that Meta can turn its massive AI spending into financial returns.
