Okay, let's get this straight. Meta's doing some financial acrobatics with Blue Owl Capital to build a data center. Twenty-seven billion dollars, people. And the supposed reason is...?
According to the press release, Blue Owl has "deep expertise" in data centers, and Meta is just, like, handling the construction. Give me a break. Meta, one of the biggest tech companies on the planet, can't build its own damn data center? Please.
So, Meta gets to keep a chunk of the debt off its balance sheet. Convenient, right? They pay Blue Owl a premium – roughly $270 million a year – for the privilege. That's real money. Is it worth it? Well, it depends on what you're trying to hide.
The article I read pointed out that Meta's been throwing money at the Metaverse like it's confetti at a parade, and the losses are "staggering." Seventeen billion in 2024 alone. Maybe they don't want investors asking too many questions about whether that money's actually going down a black hole. As one article puts it, it's a The Strange Case Of Meta.
Offcourse, maybe I'm being too cynical. Maybe they really are just streamlining things. But let's be real, when has a tech giant ever made a financial decision that wasn't designed to benefit them first and foremost?
And what's Blue Owl's angle in all this? They're getting a sweet deal – a guaranteed return on their investment, thanks to Meta's "residual value guarantee." So even if AI tanks (which, let's be honest, could happen), Blue Owl still gets paid.
The article mentions that Blue Owl will appoint the JV's board. So, legally, Meta doesn't control the board. But... does it really matter who's on the board when Meta is the sole lessee? It's like saying the landlord doesn't control the apartment building because they let the tenant pick the curtains.
I wonder if Blue Owl's investors know exactly what they're getting into here. Are they really betting on the future of AI, or are they just betting on Meta's ability to keep the charade going? Some investors are worried, as Are you a robot? points out.
Meta's Metaverse boondoggle is clearly the elephant in the room. The losses are insane, and there's no end in sight. Are they trying to bury those losses under a mountain of off-balance-sheet accounting tricks?
It's like they're trying to convince us that a turd is actually a diamond, and Blue Owl is helping them polish it.
And what about that land Meta is contributing to the venture? Swapping land for an investment entry on the balance sheet... It's all just moving things around, hoping nobody notices the shell game. Maybe I am just the crazy one here.
Meta's paying a fortune to keep debt off the books and avoid tough questions. It's a calculated risk, but it's a risk nonetheless. And honestly, I don't like the odds.
