Is Zuckerberg coming to save the market? Reports say Meta is planning a massive $200 billion data center

Mark Zuckerberg is planning a massive $200 billion data center project, which may alleviate recent market concerns about an oversupply of data centers.

On February 25th local time, The Information reported that Meta is discussing the establishment of a new data center campus for its artificial intelligence business. Based on the number of chips and power requirements for the campus, the project could exceed $200 billion, far surpassing any data center Meta has built to date, and it may become the largest of its kind.

Analysts believe that Meta is preparing for a surge in generative AI demand brought by billions of users of its AI chatbots. At the same time, this indicates that Zuckerberg may be doing everything possible to compete with OpenAI—which has already partnered with SoftBank to invest $500 billion in building new AI data centers over the next four years.

According to reports, Meta executives believe that the data center may ultimately require a power supply of 5-7 gigawatts. In comparison, OpenAI plans to acquire 8 gigawatts of power for its "Interstellar Gateway" project by 2030. For comparison, by the end of 2023, Microsoft's entire Azure cloud business will have a power capacity of about 5 gigawatts.

Reports indicate that it may take Meta more than five years to secure this power for its planned campus. It is still unclear whether Meta will build these facilities itself, contract with external developers, or collaborate with cloud computing providers like Oracle or CoreWeave to help build and operate them. Meta uses its own data centers and rents AI servers from cloud providers like Amazon Web Services and Oracle.

A person involved in the negotiations stated that if Zuckerberg changes his mind later, Meta may not necessarily have to take on the responsibility of building the proposed data center campus. Large data center deals are often phased, so Meta's deal may grant it exclusive rights without the obligation to continue developing the project. Meta may need to sign a long-term data center lease to ensure the security of the campus, but it does not need to commit to purchasing a certain number of AI chips.

Previously, Zuckerberg stated during the company's latest earnings call that Meta expects to achieve 1 GW of computing power by 2025.

Oversupply of Data Centers?

However, recently, the view that there may be an oversupply of data centers has been gaining traction.

Wall Street Watch previously mentioned that on February 23rd, Musk liked a tweet analyzing the competitive landscape of AI models, which was posted by Gavin Baker, founder and CIO of Atreides Management It is expected that in the future, only 2-3 giant data centers will be needed, with 95% of the computing power required for inference.

Recently, "Microsoft has removed two data centers" has also sparked heated discussions. In response to market skepticism, Microsoft reiterated its capital expenditure plan of over $80 billion on Monday, but acknowledged that it may make strategic adjustments in certain areas.

However, Meta still insists on high investment in AI infrastructure, planning to significantly increase capital expenditures this year, mainly for AI development. Meta stated that capital expenditures will rise to $60 billion to $65 billion by 2025, an increase of nearly 70% compared to last year. Zuckerberg also mentioned in Meta's latest earnings call that Meta plans to invest "hundreds of billions" in AI infrastructure "long-term."