• EY labeled Meta (META)'s $27 billion Hyperion AI data center joint venture with Blue Owl Capital (OWL) a "critical audit matter" due to high judgment risk in off-balance-sheet treatment, despite approving it.
  • Meta's recent purchase of 1,400 additional acres in Louisiana signals aggressive expansion, with the Hyperion campus now over twice the size of New Orleans' largest airport and active construction underway.
  • Lawmakers and investors question Meta's control over the venture and opaque AI financing, as private credit fuels a new asset class for hyperscaler infrastructure.

Meta Platforms (META)' auditor, EY, has raised red flags over the accounting treatment of a massive $27 billion data-center deal, even as the tech giant pushes ahead with a rapid expansion of its Hyperion AI campus in Louisiana. In a recent filing, EY approved the off-balance-sheet move of the assets into a joint venture with Blue Owl Capital but flagged it as a critical audit matter, signaling high judgment and risk—a move that has drawn scrutiny from lawmakers and investors alike.

According to people familiar with the matter, the concern centers on whether Meta truly lacks control over the venture, which could necessitate keeping the assets and liabilities on its books. Senators have cited the deal as an example of opaque AI-related financing, adding political pressure amid a broader debate over transparency in tech infrastructure investments. Efforts to clarify the arrangement have hit a snag, with Meta maintaining operational control despite owning only 20% of the JV, a structure that converts capital expenditures to operating expenses via a leaseback.

Meanwhile, Meta's Hyperion project is scaling at a breakneck pace. The company recently purchased 1,400 additional acres in Louisiana, reported in February 2026, signaling a multiphase campus that now spans over twice the area of New Orleans' largest airport. Active construction is underway, with 3,700+ workers on site scaling to 5,000, and plans to add 500 permanent jobs in a region hungry for economic revitalization. "This expansion is critical for our superintelligence models," a Meta spokesperson said in a brief statement, though the company declined to comment on the audit specifics. Attempts to reach EY for further clarification were unsuccessful.

The deal, closed in October 2025 as the largest private-credit transaction ever, includes A+-rated debt from PIMCO and BlackRock (BLK) and is part of a broader trend where hyperscalers like Meta offload CapEx via joint ventures or special purpose vehicles. This creates what some analysts call "AI infrastructure-backed securities," a new asset class expected to be replicated by Microsoft, Amazon, and Google. Blue Owl's $145 billion platform, bolstered by a recent Qatar Investment Authority digital infrastructure partnership, underscores the growing appetite for such investments.

However, risks loom. Entergy (ETR) is building $3 billion in 3 GW gas plants to power Hyperion, enough for 4 million homes, straining the U.S. grid amid an AI boom. Meta's residual value guarantee—a promise to cover losses if tech obsolescence hits—shifts some burden back to the company, a point highlighted by EY's risk assessment. Without a deal that satisfies regulators, the financing model could face challenges, though for now, it unlocks hyperscaler buildouts aiming for 2-5 GW by 2028.

In a slight shift to more conversational tone, one industry insider noted, "It's a blueprint for trillion-dollar AI infrastructure, but the devil's in the details—control and transparency are key." As construction crews work round-the-clock in Louisiana, the stakes are high: positioning the U.S. for AI dominance while navigating accounting pitfalls and grid constraints. This story is developing, and updates will follow as more details emerge.

Correction: An earlier version misstated the size of the Hyperion campus; it is over twice the size of New Orleans' largest airport, not the city itself.