Meta spins off $27 billion data center project, audit firm issues warning

Gelonghui, February 12th｜According to The Wall Street Journal, Meta's latest annual report contains an unusual investor alert. Audit firm Ernst & Young issued a warning regarding the financial arrangement Meta used to move a $27 billion data center project off its balance sheet, listing it as a "critical audit matter." This represents one of the most difficult and high-risk judgments auditors must make during the audit process. In October last year, Meta spun off the Hyperion data center project, transferring it into a new joint venture established with Blue Owl Capital. Meta holds a 20% stake in the joint venture, while funds managed by Blue Owl hold the remaining 80%. Beignet Investor, a holding company with Blue Owl shares, issued a then-record $27.3 billion bond to investors. Meta's claim that it does not have control over the joint venture is disputed and has drawn attention from investors and lawmakers. As a hyperscale cloud computing operator, Meta possesses the expertise to operate data centers, while Blue Owl is an investment firm. Whether the joint venture can achieve economic success will depend on Meta's decisions and professional capabilities.