Meta expands Louisiana AI data center to more than $50 billion
The Hyperion project is set to become a 5-gigawatt facility, bringing jobs and bonuses while raising local concerns over housing, taxes and power costs.
By Daniel Okafor · Business Editor
4 min read
Meta said Monday it will expand its Hyperion AI data center in Richland Parish, Louisiana, into a 5-gigawatt project costing more than $50 billion. The plan sharply raises the scale of a rural development that began in 2024 with a $10 billion estimate and has become a test case for how communities absorb the AI infrastructure boom.
Meta said Hyperion will be its largest data center and among the world’s biggest AI infrastructure projects. The company had previously projected more than 2 gigawatts of computing capacity at the site, which supports the kind of systems used to train large language models.
The expansion follows a state incentive package. In late 2024, Louisiana Gov. Jeff Landry signed a law exempting data centers built before 2029 from sales taxes for 20 years. Landry said in a Monday statement that Louisiana has secured more than $150 billion in new investment by creating conditions for companies to build quickly and at scale.
Local business owners cited by Meta say the project has brought new revenue and better pay. Scott Holmes, owner of Mayo Tours, said in a statement that his charter bus company grew from 40 coaches to 102 and that most of its drivers working on the site now earn more than $80,000 a year in a region where median income is $42,000.
Other residents have raised concerns about the pace and effects of the buildout in a parish of about 20,000 people. Fortune reported this spring that thousands of construction workers have contributed to heavier traffic, higher rents and attempted evictions in the area.
Erika James, a 34-year-old mother of two who grew up in Richland Parish and now lives in a mobile home park in Monroe, told Fortune that local families are struggling to find housing they can afford. She said her family has considered leaving the area because there is “nowhere to go” for people who cannot pay sharply higher prices.
Tax breaks and local gains
Louisiana Economic Development Secretary Susan Bourgeois told the Times-Picayune that Meta made clear during negotiations that incentives were required for the project to proceed in the state. Mike Busada, a Shreveport attorney involved in the negotiations, told the paper the goal was to offer only what was needed to secure the investment.
Meta is exempt from state and local sales taxes on equipment inside Hyperion, including servers, chillers and electrical systems, but it still pays a 1% local sales tax on purchases. Meta said an ordinance directs that money to school employee bonuses, with some local teachers receiving more than $50,000.
The National Education Association lists Louisiana’s average teacher salary at $56,785, ranking the state 49th nationally. Scott Franklin, a director at the Richland Parish chamber of commerce, told The Wall Street Journal that sales tax collections at that level may be temporary because they are tied to construction spending.
Rachel Peterson, Meta’s vice president of data centers, said in a statement that the Louisiana workforce and local partnerships have made Hyperion a cornerstone of the company’s global infrastructure. She said Meta has already contracted more than $1.6 billion with local companies and is supporting thousands of jobs.
Power costs draw scrutiny
The project also brings major electricity demands. Entergy is building 10 new power plants and 240 miles of transmission lines to serve Hyperion, with Meta paying for the work, agreeing to fund up to 2.5 gigawatts of renewable energy and signing what Entergy calls a Ratepayer Protection Pledge.
Consumer and environmental groups remain concerned about risks to other utility customers. Earthjustice, representing the Alliance for Affordable Energy and the Union of Concerned Scientists, asked Louisiana regulators in January to investigate Meta’s financing arrangement with Blue Owl Capital, under which Meta sold roughly 80% of the data center to a venture debt firm.
Paul Arbaje, an energy analyst at the Union of Concerned Scientists, said in a statement that Louisiana ratepayers may have less protection than before and urged regulators to examine the financing structure. The Louisiana Public Service Commission declined in February to take up the probe, drawing criticism from Earthjustice attorney Susan Stevens Miller.
Landry moved in June to address similar concerns by directing the state economic development agency to draft rules intended to protect consumers from the cost of new power plants. The debate in Louisiana mirrors fights elsewhere as large technology companies seek tax and energy deals for AI data centers.
This story draws on original reporting from Fortune.