Athira Sethu
Kochi, 28 February 2025
Apollo Global Management is negotiating to lead a $35 billion funding transaction for Meta Platforms Inc. to finance the construction of data centers in the United States. The talks are preliminary, and although Apollo is likely to contribute a large percentage of the funding, there is no assurance that the transaction will be completed.
KKR & Co. is also reportedly part of the investor group. This deal is significant because alternative asset managers like Apollo have previously invested in technology companies but not to this extent. For example, Databricks Inc. had raised over $5 billion in funding from the likes of Blackstone, Apollo, and Blue Owl Capital. Apollo previously oversaw an $11 billion investment in a joint venture with Intel in the prior year.
Meta, which is already set to invest as much as $65 billion this year on AI-related initiatives, is putting its money into constructing new data centers and hiring more AI staff.
CEO Mark Zuckerberg announced that Meta’s expenditure includes building a new massive data center and expanding AI infrastructure. There is also a growing need for large investments in AI infrastructure, as the market size needs hundreds of billions of dollars in investment to serve growing demands for AI capability, analysts project. Investors keen to be part of the AI economy have had it rewarded by equity markets in recent years.
Meta’s push into AI has involved the firm heavily investing in hardware and AI software. Zuckerberg has said the firm hopes its AI chatbot, Meta AI, will be used most worldwide by the end of the year. Meta has also developed an open-source language model, Llama, and is developing AI-powered smart glasses.
The company’s total investment in AI infrastructure can in the future go up to hundreds of billions of dollars, making it even stronger in the growing AI market. As Microsoft too is investing greatly in data centers, Meta’s investments are indicative of the growing importance of AI and the need for the infrastructure to support it.
