The New York Times reports:

A Louisiana state legislative committee was about to consider a bill in April 2024 when Richard Nelson, then the state’s revenue secretary, received an urgent message from Gov. Jeff Landry. Get the bill passed, the newly elected Republican governor told him, because they needed it for something else.

Mr. Nelson walked across a room in Baton Rouge’s towering State Capitol to the bill’s author, Chris Turner, a Republican state representative.

“‘Hey, we need to hijack your bill,’” Mr. Nelson told Mr. Turner. “‘I can’t really tell you what it’s about. All I can tell you is that it’s important.’”

Mr. Turner agreed. The bill had started out as a tax rebate for fiber-optic equipment. But when it was voted on by the state House of Representatives less than two months later, it had become a tax rebate for equipment used in data centers.

Mr. Turner had helped land the largest development in Louisiana’s history: a $50 billion data center for the Silicon Valley giant Meta that planners say could cover about six square miles and use seven times as much energy as New Orleans.

Meta wanted the rebate to build its data center in Richland Parish, an impoverished farming community in Louisiana’s northeast corner. The tech company also needed a secret deal done quickly, and state officials were eager to oblige.

Rewriting the bill was a critical part of a nine-month process that Meta used to cut deals behind the scenes, avoid local opposition and offload financial risk, according to interviews with more than 40 people and a review of corporate filings, tax records, property records and meeting transcripts.

The secrecy was agreed to by nearly everyone involved, from utility executives to the governor’s office to a local elected official who knew about the talks with Meta and sold 300 acres of his own property for the project.

The upshot was a deal that was nearly ironclad for Meta because everyone else took on most of the potential downside. Mark Zuckerberg, Meta’s chief executive, also gave his company an escape hatch to get out of it years before its partners.

Those partners include Entergy Louisiana, the state’s largest power company, and Blue Owl, a Wall Street investment firm, according to public statements from the companies and investor documents. If Meta should pull out of the project because of a natural disaster, Blue Owl and its investors could be stuck with tens of billions of dollars in debt. Should Meta exit its lease early for other reasons and pay high penalties for doing so, Entergy and its customers could wind up saddled with higher costs.

Adding to their risk, insurance companies would not fully insure Meta’s facility because of its size and location in the Louisiana Delta flood plains.

The New York Times’s examination shows for the first time how Meta used secrecy and speed to pave the way for its giant project, which it calls Hyperion. At a pivotal moment for the A.I. boom, Hyperion could be a blueprint for other companies intent on avoiding local opposition in order to get massive data centers built fast. [Continue reading…]