The Desert Becomes a Data Center: Meta's $3.3 Billion Bet on Los Lunas, New Mexico
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In the spring of 2016, a small agricultural village of roughly 15,000 people on the western bank of the Rio Grande received a phone call that would permanently alter its trajectory. Meta Platforms — then still Facebook — had selected Los Lunas, New Mexico, population 15,000, as the site for what would become one of the most consequential technology infrastructure investments in the American Southwest. Nearly a decade later, that decision has catalyzed more than $2.5 billion in direct investment, attracted a constellation of industrial and logistics tenants, and transformed a sleepy Valencia County community into a node in the global AI infrastructure grid. It has also raised questions — urgent ones — about water, power, community capacity, and the terms on which rural America absorbs the infrastructure demands of the digital economy.
The Capital Flood Behind the Campus
To understand Los Lunas, one must first understand the broader capital cycle now reshaping American geography. Meta's capital expenditure in 2022 stood at $31.4 billion. In 2023, the company briefly pulled back — to $28.1 billion — as investors pressured management over the metaverse pivot. That restraint proved short-lived. By 2024, capex surged to $39.2 billion as the AI arms race accelerated. In 2025, it reached approximately $72.2 billion. For 2026, Meta's guidance range of $115 to $135 billion represents a figure larger than the GDP of most countries and roughly double what the company spent building the internet's social infrastructure over its first fifteen years.
Meta is not alone. The Futurum Group estimates combined Big Tech infrastructure capital expenditure for 2026 — across Meta, Microsoft, Alphabet, and Amazon — at $660 to $690 billion. This is not incremental investment in existing data center capacity. It is a structural reshaping of where and how artificial intelligence is computed. The scale demands geography: vast tracts of affordable land, access to substantial power infrastructure, and — critically — proximity to renewable energy sources capable of satisfying both regulatory ESG commitments and the raw electrical appetite of GPU clusters running 24 hours a day.
New Mexico, long overlooked by the data center industry, suddenly checked multiple boxes simultaneously.
750 Acres on the Rio Grande Floodplain
The Los Lunas campus sits at 4250–4320 Messenger Loop NW, a purpose-built industrial address in a greenfield zone southwest of the village center. The site encompasses approximately 750 acres and today houses eight completed data center buildings totaling approximately 3.8 million square feet — a footprint larger than the Pentagon. CoStar rates the campus five stars, the highest designation in its industrial property classification system. The individual buildings are engineering at scale: each data hall measures approximately 120,000 square feet, houses roughly 3,200 servers, and operates at a power draw of 40 megawatts per building, with expansion-generation facilities designed for 80 megawatts each.
The campus carries LEED Gold v4 certification, Meta's standard for major owned facilities. In 2023, the campus consumed more than one million megawatt-hours of electricity — roughly equivalent to the annual power consumption of 90,000 average American households. Meta has extended fiber-optic connectivity to Texas via a 350-mile dedicated line, ensuring the campus is not merely a power node but an active participant in Meta's global routing architecture.
Construction has proceeded in three phases. Phase 1, initiated in late 2016 with a groundbreaking attended by Governor Susana Martinez and announced directly by Mark Zuckerberg, involved an initial $250 million investment in a 510,000-square-foot first building that opened in February 2019. The campus expanded rapidly: by 2021, six buildings were operational and cumulative investment had surpassed $1.2 billion. In 2022, Meta paused construction across its global portfolio to redesign its facilities for AI workloads — the server architectures optimized for social media feed ranking are materially different from those required for large language model training and inference. That pause lasted approximately 18 months.
Phase 2 resumed with renewed urgency. Buildings 7 and 8, each representing approximately $400 million in capital, came online in 2024. PNM Resources, New Mexico's primary investor-owned utility, commissioned a dedicated substation to serve the campus in November 2024. Phase 3, approved by the Village Council in December 2024 through a new series of Industrial Revenue Bonds, will add two additional buildings explicitly designated for AI and machine learning workloads — described by Meta as "the first of their kind in Meta's portfolio." Phase 3 carries an estimated budget of $800 million and is expected to break ground in the spring of 2025, bringing total campus investment to approximately $3.3 billion at completion.
The Incentive Architecture
The economic relationship between Meta and the Village of Los Lunas is structured through a layered incentive architecture that reflects the negotiating leverage a $1.4 trillion market capitalization company commands in a rural New Mexico municipality.
The centerpiece is the Industrial Revenue Bond mechanism. In June 2016, the Village authorized up to $30 billion in IRBs for the Meta campus — a figure that functions as a ceiling rather than a commitment. IRBs in New Mexico carry a 30-year property tax exemption for the issuing entity, provided the underlying asset remains on the tax rolls at zero assessed value for the bond term. For a $3.3 billion facility, the property tax foregone over 30 years represents a subsidy of substantial magnitude. The December 2024 Phase 3 approval authorized an additional series of IRBs with individual authorizations of up to $7.5 billion across six series.
In lieu of property taxes, Meta makes Payment In Lieu of Taxes (PILOT) contributions to the Village: $50,000 per year for the first building, scaling to $450,000 per year at full campus buildout. The gross receipts tax (GRT) structure provides Meta with reimbursement of up to 75 percent of Village-level GRT liability, capped at $1.6 million per year. The New Mexico Economic Development Department contributed a $10 million Local Economic Development Act (LEDA) grant — the largest single LEDA award in the state's history at the time — applied specifically to water rights acquisition and the construction of a treatment facility capable of supplying Meta's water needs. The state's Job Training Incentive Program (JTIP) has funded portions of workforce development.
Notably absent from the incentive package is a state-level data center tax incentive statute. As of this writing, New Mexico is among a minority of states — roughly 14 out of 50 — that lack a codified data center exemption from gross receipts or sales taxes on equipment and electricity. The 36 states that do offer such exemptions compete aggressively for hyperscale tenants; New Mexico's absence from that group is a recurring subject of industry criticism and has been noted in site selection analyses as a structural disadvantage relative to Texas, Arizona, and Utah.
The regulatory relationship has not been without friction. In 2019, the New Mexico Public Regulation Commission ruled that Facebook could not pass the full cost of a $39 million dedicated transmission line to PNM ratepayers, ordering the company to absorb a proportionate share. The decision established a precedent — significant for New Mexico's expanding data center pipeline — that public utility customers need not fully subsidize the interconnection infrastructure of hyperscale private tenants.
Powering a Campus That Never Sleeps
Meta's energy strategy at Los Lunas is perhaps the most technically ambitious dimension of the project. The campus draws power from a portfolio of renewable energy projects spanning six New Mexico counties and totaling 885 megawatts of contracted solar and wind capacity, supplemented by 100 megawatts of battery energy storage across two BESS projects. Key solar assets include a 190-megawatt facility in Valencia County and a 50-megawatt project in Sandoval County; the Route 66 Solar project in Cibola County, developed in partnership with NextEra Energy, adds additional utility-scale generation.
The geothermal dimension is more forward-looking. In June 2025, Meta announced a 150-megawatt geothermal power purchase agreement with XGS Energy, to be executed in two phases with full operational capacity targeted by 2030. A parallel 150-megawatt agreement with Sage Geosystems follows similar parameters. Geothermal energy — baseload, carbon-free, and unaffected by weather variability — addresses a structural limitation of solar-dependent data center power strategies in the Southwest. These deals are among the largest geothermal offtake agreements executed in the United States.
For Phase 3, PNM has filed for regulatory approval of three additional solar-plus-storage projects — Star Light, Windy Lane, and Four Mile — with targeted operational dates of December 2026 and December 2027.
Cooling architecture has evolved alongside power strategy. Early campus buildings employed indirect evaporative cooling systems that consume approximately 80 percent less water than conventional chilled-water data center cooling. Phase 3's AI-optimized buildings will deploy liquid cooling — direct-to-chip or immersive systems capable of managing the thermal density of Nvidia H100 and successor GPU architectures that air-based systems cannot adequately address.
Water remains the most contested resource. The campus consumed 283 megaliters (approximately 75 million gallons) of water in 2023. Meta holds a guaranteed water allocation of 1.5 million gallons per day from the Village of Los Lunas, expandable to 4.5 million gallons per day at full buildout. The company has pledged to restore more than 200 percent of its water consumption to local watersheds and reported restoring approximately 64 million gallons in 2020. The Rio Grande basin, already under long-term stress from drought and over-appropriation, faces projected groundwater recharge losses of 25 percent by 2070 under median climate scenarios.
Employment: The Complicated Math of Hyperscale Jobs
Modern hyperscale data centers are engineering marvels that employ relatively few people for their capital investment. The Los Lunas campus maintains approximately 300 to 400 full-time operational staff. Meta's career listings for the campus in early 2025 reflected 154 open positions spanning a wide salary range: Production Operations Engineers at $40 to $62 per hour, Critical Facilities Engineers at $42 to $60 per hour, Construction Managers at $150,000 to $209,000 annually, and Global Infrastructure Engineers commanding $208,000 to $289,000 — compensation levels that represent a multiple of Valencia County's median household income.
The 1,400-employee figure that appears in CoStar's tenant record and in Meta's public disclosures reflects a composite: roughly 350 to 400 permanent operational staff, augmented by approximately 1,000 to 1,100 construction workers who have been continuously present on the campus since groundbreaking in late 2016. Construction activity at Los Lunas has never fully ceased: as one phase of permanent construction concludes, another commences. Meta's renewable energy portfolio has supported an estimated 1,400 construction-equivalent jobs generating approximately $120 million in construction labor income. Approximately 70 percent of Meta's contracting base — 138 firms — are New Mexico-domiciled.
Phase 3 will add approximately 30 net new permanent positions, a figure that illustrates the capital intensity of modern AI infrastructure. The campus generates economic value primarily through procurement spending, tax flows, utility revenue, and the agglomeration effects its presence catalyzes — not through direct employment headcount.
A Village Transformed
The most visible consequence of Meta's arrival is demographic. Los Lunas has grown by approximately 15 percent since 2020, from roughly 17,300 residents to more than 20,000 — making it one of the three fastest-growing municipalities in New Mexico. Albuquerque, 25 miles to the north, declined by approximately one percent over the same period. New Mexico statewide growth averaged 0.3 percent annually.
The census tract immediately surrounding the campus — the nearest one to Messenger Loop NW — carries the highest median household income in Valencia County, at $93,580. This is not coincidental: the workforce Meta and its contractors require has concentrated in proximate housing, driving both income levels and housing demand. Esri's demographic projections for the one-mile ring around the campus show population growth of 2.0 percent per year through 2030, against state and national baselines of 0.3 and 0.4 percent respectively. Median household income in that ring is projected to grow from approximately $81,000 in 2025 to $89,000 by 2030.
The Village's gross receipts tax revenue tells a parallel story. Pre-Meta, Los Lunas collected approximately $11 million annually. In November 2024 alone — a single month — the Village received $5 million in GRT proceeds. Cumulative GRT collections attributable to the campus since 2016 have surpassed $145 million.
Meta's gravitational pull has attracted a cluster of industrial and logistics investment that would have been improbable in a pre-campus Los Lunas. Amazon constructed a fulfillment center exceeding one million square feet — adding more than 600 jobs and generating an estimated $300 million in economic impact. Niagara Bottling established a regional distribution facility. Manna Capital Partners announced an aluminum manufacturing operation projected to employ 950 workers. Pacific Fusion disclosed a $1 billion fusion energy research campus. Corniche Capital added 400,000 square feet of industrial inventory. The I-25 interchange serving the campus is undergoing a $220 to $234 million expansion — the longest bridge project in New Mexico at 2,000 feet — with Phase 1 construction commencing in late 2024, funded in part by $154 million in federal and state transportation allocations.
The University of New Mexico's Workforce Training Center opened a 19,000-square-foot facility in Los Lunas in January 2022, specifically positioned to serve the technical workforce requirements of the data center cluster. The Santa Fe New Mexican, in a piece that has become something of a touchstone in regional economic development discussions, compared the transformation of Los Lunas to Los Alamos in the 1940s — an apt if sobering analogy, given that Los Alamos's transformation also arrived from outside, redefined the community in fundamental ways, and carried consequences its residents did not fully anticipate.
New Mexico's Expanding Data Center Thesis
The Los Lunas campus did not emerge from a vacuum, and it will not remain the state's dominant data center story for long. New Mexico is experiencing a second wave of hyperscale interest that dwarfs even Meta's investment in absolute dollar terms.
Project Jupiter, a campus in Santa Teresa in Doña Ana County near the Texas border, has received approval for $165 billion in IRBs — a figure that requires a moment of rereading. Oracle is understood to be the primary tenant, with the facility positioned to serve OpenAI's computational requirements under the Stargate consortium. A community opposition lawsuit was pending as of late 2025. New Era Energy has disclosed plans for a 7-gigawatt campus in Lea County. Zenith Volts is developing a 1.25-gigawatt facility near Roswell. The aggregate pipeline, if executed, would make New Mexico among the most significant data center geographies in North America.
The structural attractions are real. New Mexico's commercial electricity rate averages 9.69 cents per kilowatt-hour — approximately 15.8 percent below the national average, according to the U.S. Energy Information Administration. The state ranks second nationally in utility-scale solar energy potential and tenth in wind. The Albuquerque metropolitan statistical area provides a labor pool of approximately 900,000, augmented by the technical talent concentrated at Sandia National Laboratories and Los Alamos National Laboratory. The SunZia Wind project, currently under construction, will add 3,500 megawatts of transmission-connected renewable capacity and pass through New Mexico's eastern corridor. New Mexico's Energy Transition Act mandates 100 percent carbon-free electricity by 2045, providing hyperscale tenants with a regulatory backstop for long-term renewable procurement strategies.
Against these advantages, two structural risks warrant attention. Water scarcity is not a theoretical concern in a basin where surface flows are already over-appropriated and groundwater recharge is declining. The data center industry's per-facility water demand — even with evaporative cooling efficiency improvements — places real stress on a resource that agricultural users, municipalities, and tribal nations are already contesting in state court and federal administrative proceedings. The second constraint is institutional capacity: rural New Mexico counties face genuine challenges in conducting the legal, environmental, and fiscal due diligence that IRB authorizations of this magnitude demand. The gap between the capital seeking deployment and the local capacity to evaluate its terms is not trivial.
Conclusion
Meta's Los Lunas campus is, at its core, a demonstration that the geography of artificial intelligence is not inevitable. The assumptions that governed data center site selection in the 2010s — proximity to coastal talent markets, access to established fiber corridors, adjacency to existing hyperscale clusters — are giving way to a different calculus driven by power availability, land cost, renewable energy potential, and the sheer scale of capital that must be deployed. A high-desert village in central New Mexico, by those metrics, becomes competitive with Northern Virginia.
The transformation of Los Lunas over the past eight years offers a template — and a warning — for communities across the rural American West. The economic benefits are real and measurable: $145 million in tax revenue, 15 percent population growth, a diversified industrial base where one did not exist, infrastructure investment that would have required decades through conventional municipal financing. The costs and risks are also real: foregone property tax through 30-year IRB exemptions, water consumption in a water-scarce basin, and the structural vulnerability of a community whose economic trajectory is now substantially dependent on the capital allocation decisions of a single company in Menlo Park.
When Mark Zuckerberg announced plans for a $60 billion-plus U.S. data center buildout for 2025, and subsequently guided toward $115 to $135 billion for 2026, Los Lunas was already eight years into absorbing what that kind of capital commitment looks like on the ground. The answer, thus far, is: transformative, complicated, and irreversible.
March 7, 2026 by a Michal Mohelský, principal of MMCG Invest, LLC, data center feasibility study consultant
Sources
Meta Platforms, Inc. — Annual Report 2024 & Q4 2024 Earnings Call Meta investor relations disclosures on capital expenditure guidance ($39.2B in 2024; $60–65B initial 2025 guidance revised to $72.2B; $115–135B in 2026), GPU procurement targets, and U.S. infrastructure commitments. investor.fb.com
Meta Data Centers — Los Lunas Campus Official Page Primary source for facility specifications, LEED certification, sustainability reporting, water consumption data (283 megaliters in 2023), renewable energy portfolio (885 MW + 100 MW BESS), and campus development timeline. datacenters.atmeta.com/asset/los-lunas/
Data Center Dynamics — "Facebook Launches Third Data Center in Los Lunas, New Mexico" Trade press documentation of Phase 1–2 construction milestones, building counts, capital investment per phase, and campus expansion chronology. datacenterdynamics.com
Santa Fe New Mexican — "Similar to Los Alamos in the 1940s, Los Lunas Getting Transformed by Tech"Regional investigative reporting on community transformation, GRT revenue trajectory ($11M annually pre-Meta; $5M in November 2024 alone; $145M cumulative), population growth, and ancillary investment including Amazon, Manna Capital, and Pacific Fusion. santafenewmexican.com
Santa Fe New Mexican — "Meta, Energy Company Announce Plans for Geothermal Plant in New Mexico"Primary reporting on 150 MW geothermal power purchase agreement with XGS Energy (June 2025, two-phase delivery, operational by 2030) and parallel Sage Geosystems agreement. santafenewmexican.com
Village of Los Lunas — Industrial Revenue Bond Resolutions & LEDA Grant Records Official municipal records documenting June 2016 IRB authorization (up to $30B), December 2024 Phase 3 IRB approval (six series, up to $7.5B each), PILOT payment schedule ($50K to $450K/yr), GRT reimbursement cap ($1.6M/yr), and $10M LEDA grant terms. loslunasnm.gov
New Mexico Partnership — IT & Data Centers Industry Profile State economic development agency documentation of New Mexico's competitive positioning: electricity rates (9.69¢/kWh, 15.8% below national average), solar and wind resource rankings, Albuquerque MSA labor pool (900,000+), Sandia/LANL proximity, and Energy Transition Act (100% carbon-free by 2045). nmpartnership.com/new-mexico-major-industries/it-data-centers/
U.S. Census Bureau — American Community Survey 5-Year Estimates, 2019–2023 (via Esri) Demographic baseline for Los Lunas trade area rings (1/5/10 mile): population counts, household income (median $80,998 at 1 mile; $66,928 at 5 miles, 2025 estimates), racial composition (Hispanic/Latino 53.6%–59.1%), educational attainment, employment by industry, projected growth rates (2.0%/yr at 1 mile vs. 0.3% statewide through 2030), and median net worth. census.gov / esri.com
CoStar Group — Tenant Location Report: Meta at 4320 Messenger Loop NW, Los Lunas, NM Proprietary commercial real estate database record documenting occupied square footage (4,000,000 SF), move-in date (December 2018), building specifications (5-Star rating, single tenancy, data center classification), campus park designation, and corporate occupancy profile.
PNM Resources — Integrated Resource Plan & Rate Case Filings (2019, 2024) Regulatory filings documenting Meta's special service contract structure, 2019 PRC ruling on $39M transmission line cost allocation, November 2024 dedicated substation commissioning, and pending approval for Phase 3 power supply (Star Light, Windy Lane, Four Mile solar-plus-storage projects).
Futurum Group — Big Tech Infrastructure Capital Expenditure Forecast, 2026 Independent analyst estimate of combined hyperscale infrastructure capex for 2026 at $660–690 billion across Meta, Microsoft, Alphabet, and Amazon, providing market context for Meta's site-specific investment decisions.
U.S. Energy Information Administration — New Mexico State Energy Profile Federal baseline data on New Mexico commercial electricity pricing (9.69¢/kWh), utility-scale renewable capacity rankings (#2 solar potential nationally, #10 wind), and projected Rio Grande basin groundwater recharge stress under climate scenarios. eia.gov/state/new-mexico