AI infrastructure investment continues to increase; Meta spends over $10 billion to build a 1 GW data center

On Wednesday, February 11, local time, Meta announced that as part of its large-scale artificial intelligence (AI) infrastructure development plan, the company has begun constructing a new data center.

This data center, with an investment of over $10 billion, will be located in Lebanon, Indiana, with a capacity of over 1 gigawatt. This power scale is sufficient to supply electricity to hundreds of thousands of American households.

The term Lebanon primarily refers to the country in West Asia. Additionally, several states in the United States have cities named Lebanon.

Meta stated that the data center will handle both the company’s AI-related workloads and core product operations, making it one of its largest infrastructure projects to date.

As the AI arms race intensifies, tech giants are vigorously building data centers, but this AI infrastructure boom is facing increasing criticism from local community residents. Criticisms include rising utility costs and noise disturbances caused by cooling systems.

In response, Meta said it will bear the full electricity costs for the data center and will donate $1 million annually to the Boone REMC community fund over the next 20 years to help residents pay energy bills, as well as fund emergency water assistance. The data center will also use a closed-loop water system, which Meta claims will “require little to no water for most of the year.”

Additionally, Meta announced it will invest over $120 million in Lebanon for water infrastructure construction and upgrade roads, power lines, and local utilities.

Meta’s AI ambitions are not limited to a single 1-gigawatt data center. In July last year, Meta CEO Mark Zuckerberg stated that the company would build a massive Hyperion facility in Louisiana, which is large enough to cover a significant part of Manhattan, with a final capacity exceeding 5 gigawatts.

Last week, during its earnings report, Meta announced plans to invest up to $135 billion in AI infrastructure by 2026. In comparison, Meta’s expenditure in 2025 is projected to be $72.2 billion.

Meta is not the only tech company investing heavily in AI infrastructure this year. Google stated in its earnings report that it plans to spend $180 billion by 2026. Amazon even expects its spending to reach $200 billion this year.

Due to the significant increase in capital expenditures, the stocks of Microsoft, Google, and Amazon all declined sharply after their earnings reports. Although Meta’s stock price was initially boosted by better-than-expected earnings, it later fell back along with other tech peers.

However, Bill Ackman’s hedge fund, Pershing Square, disclosed on Wednesday that it has significantly increased its holdings in Meta.

It is reported that Pershing Square owns $2 billion worth of Meta shares, with an average purchase price of $625 per share.

In its annual investor report, the fund stated: “We believe that Meta’s current stock price undervalues the company’s long-term upside in artificial intelligence. For one of the world’s greatest companies, its valuation is severely underestimated.”