Meta’s AI gamble: Dina Powell McCormick opens door to Wall Street
Former Goldman Sachs executive explores financing once alien to Silicon Valley for $600bn infrastructure push
In mid-March, Meta president Dina Powell McCormick hosted a dinner at The Grill in New York for some of the most important money managers in the world.
Those present at the swanky Midtown steakhouse included Yasir al-Rumayyan, the governor of Saudi Arabia’s Public Investment Fund, Brookfield Asset Management chief Bruce Flatt, BlackRock board member Adebayo Ogunlesi, Blackstone chief Stephen Schwarzman and president Jonathan Gray.
Powell McCormick convened the soirée, which capped a packed day of meetings across Wall Street, to deliver a message: Meta’s radical plan to become a leader in AI will require vast amounts of external capital and her door was open to discuss innovative financing structures and partnerships.
Since joining Meta in January, the former Goldman Sachs executive has quickly become one of Silicon Valley’s most important power brokers as she helps oversee one of the largest capital deployments in corporate history. The social media company plans to invest $600bn in the US alone by 2028.
Powell McCormick — who also boasts Republican credentials from her time serving in Donald Trump’s first administration and deep sovereign-wealth relationships — has been exploring complex off-balance-sheet arrangements and structured finance once alien to Meta’s C-suite, according to multiple people familiar with the matter.
For most of its two-decade history, chief executive Mark Zuckerberg has been able to fund Meta’s growth from the vast horde of advertising cash generated by Facebook and Instagram. But the spiralling costs of building and powering data centres, acquiring sought-after chips and an AI talent war have required a new direction.
Alongside chief financial officer Susan Li, one option Powell McCormick is considering is raising tens of billions in new equity, following Google’s successful $85bn stock sale, the FT reported earlier this month. Meta said in response it was exploring “flexible ways” to finance its AI ambitions.
Powell McCormick is also part of the senior group debating even more profound changes to strategy, including radical ideas such as whether the $1.5tn company should set up a cloud-computing business to rival Amazon, Google and Microsoft.
“This is a new Meta and she’s bringing forth this type of connectivity,” said BlackRock chief executive Larry Fink. “The speed with which we have done a number of transactions in the last four months is the sum of everything we’ve ever done in all our years with Meta.”
“Mark [has] recognised the importance of compute as foundational for everything Meta is going to do,” said Blackstone president Gray. “If Dina Powell is in the room, something’s going to get done.”
She faces steep challenges. Meta is smaller than other hyperscalers, leaving it in a more precarious position as it issues increasing debt and free cash flow compresses. The company is also lagging rival AI labs in the race to build state of the art models, with many industry insiders doubtful that it can become a leader.
Taking on a broad newly created role, she must also navigate internal politics at Meta, where the upper ranks are typically made up of longtime Zuckerberg acolytes. “There is a little resistance,” said one insider. “They don’t always like the questions [she asks].”
Powell McCormick, who moved to Texas from Egypt aged 5, joined Meta’s board of directors a year before she took the helm as president, forming a close working relationship with Zuckerberg.
A former deputy national security adviser under Trump, her appointment was publicly praised by the president and she joined his China business delegation in May. She is married to Republican senator David McCormick.
Her shift to Meta’s executive leadership team, a rare banking veteran appointment in clubby Silicon Valley, has coincided with Zuckerberg’s own overtures to the president and the company’s costly and tumultuous attempt to centre its focus on developing “personal superintelligence”.
Meta has forecast AI-related capital expenditures will jump to as much as $145bn this year and even higher in 2027. Zuckerberg is offsetting the spending spree with rounds of lay-offs, sending morale to all-time lows.
Powell McCormick is co-head of a new initiative called “Meta Compute”, alongside the company’s longtime head of global infrastructure Santosh Janardhan and entrepreneur Daniel Gross.
Zuckerberg has said the initiative will build “hundreds of gigawatts” of AI infrastructure over the coming decades. A single gigawatt of data centre capacity costs tens of billions of dollars to build and can consume power comparable to a nuclear reactor’s output.
Delivering on the ambitions requires Meta to secure permits and energy deals while embracing more adventurous financing through bond and private capital markets. In October, it raised a $27bn bond via a joint venture with private capital firm Blue Owl to build a huge Louisiana data centre dubbed “Hyperion”.
Ahead of the March dinner, Powell McCormick and the Meta Compute executives met Blackstone, Brookfield, KKR, BlackRock and another of her former employers BDT & MSD Partners to discuss what one person familiar with the meetings described as “the art of the possible”.
Her colleague Gross said she had brought “finger tips feeling” — or an intuitive flair — to Meta’s dealmaking. “Dina knows how to shimmy, but she does it in a very charming way,” said Dame Jane Fraser, Citigroup’s chief executive. “Behind the charm, there’s a steeliness.”
Meta had already explored AI partnerships in the Middle East before Powell McCormick joined, according to people familiar with the discussions. But as the former head of Goldman Sachs’ sovereign wealth business, Powell McCormick is well-networked in the region.
She counts Saudi crown prince Mohammed bin Salman and United Arab Emirates President Mohamed bin Zayed al-Nahyan among her contacts, according to people who know her.
“Dina has an extraordinary network of relationships across the government, particularly in Republican circles, and very powerful ties with capital allocators and big sovereigns around the world,” said David Solomon, Goldman Sachs’ chief executive. “When you look at the capital needs for the AI acceleration at Meta, Dina can play a valuable role.”
The push comes amid stiff competition for capital, as SpaceX, Anthropic and OpenAI also seek funding from IPOs. When the FT reported earlier this month that Meta had been discussing a potential share sale, its stock fell more than 5 per cent.
It is also unclear how much demand for computing power there will be in the future, leaving Meta’s longer-term infrastructure strategy in flux.
Until recently, Meta executives have focused on building capacity primarily for its own AI operations, while retaining the option to sell any excess. Powell McCormick and other leaders are discussing whether the company could build data centres to proactively sell computing capacity as a cloud provider, several people said.
Such a push would require high upfront costs to compete with well-established rivals and setting up large enterprise sales relationships.
“Can they run data centres as an independent operator that’s leasing it to third parties?” said Naveen Sarma, a managing director at credit rating agency S&P Global. “It’s a good question.”
Outside Meta, she has quickly become a buffer for criticism, casting the AI boom as “another industrial revolution” and spearheading the launch of a new “workforce academy” that will train workers to build data centres.
At the Economic Club of New York last week, Powell McCormick dismissed concerns about data centre disruption and argued Meta’s grid investments can lower local electricity costs.
“We’re smack dab in the middle of what is a controversial area around the impact that AI is going to have on society,” said Peggy Alford, a Meta board member and eBay’s chief financial officer. “She saw a real opportunity to both help individuals and small businesses not be left behind, but also make it part of how Meta is talking about what they’re doing this for.”