Meta’s Hyperion data center reaches a valuation of $50 billion and divides a community.

      Meta's Hyperion data center in rural Louisiana has surged from an initial cost of $10 billion to exceeding $50 billion in less than two years. In a parish with a population of 20,000, this has created wealth for some residents while causing others to be priced out of their homes.

      Recently, Meta announced that their Hyperion data center in Richland Parish will expand to a 5-gigawatt facility with a budget surpassing $50 billion, making it Meta’s largest data center and one of the most significant AI projects globally.

      The figures tell the tale. Construction began in December 2024 with a projected cost of $10 billion. By October, the estimate had risen to $27 billion, as reported by CNBC, following Meta's collaboration with Blue Owl Capital. Now, the budget has exceeded $50 billion, marking a fivefold increase in under two years.

      A divided town

      Richland Parish, home to approximately 20,000 residents, ranks among the poorest areas in Louisiana. A project of this magnitude does not go unnoticed.

      For some, it represents financial opportunity. Meta claims to have engaged local companies for over $1.6 billion in contracts, along with over $1 billion earmarked for infrastructure improvements such as roads and water systems. Scott Holmes, who operates a local charter bus service, reported that his fleet increased from 40 to 102 coaches, and his on-site drivers now earn more than $80,000 in an area with a median income of $42,000.

      Conversely, others have experienced it as a form of displacement. With droves of construction workers arriving, rents have soared and traffic congestion has worsened, as noted by Fortune. Erika James, a 34-year-old mother of two who grew up in Richland Parish, found herself relocating 30 minutes away to a mobile home park. “There’s literally a sign outside welcoming Meta workers while local families are left wondering where to go,” she expressed. “If you can’t afford the escalating prices, there’s nowhere to turn.”

      The tax breaks supporting education

      The economic dynamics are noteworthy. In late 2024, Governor Jeff Landry enacted legislation granting data centers established before 2029 a 20-year sales tax exemption. However, Meta still pays a 1 percent local sales tax on its purchases.

      On a $50 billion construction cost, that 1 percent accumulates significantly. A local ordinance allocates that revenue to school bonuses. This year, some teachers in Richland Parish reportedly received bonuses exceeding $50,000, up from $10,000, according to Meta. The average teacher salary in Louisiana is $56,785.

      However, the benefit is expected to be temporary, linked to the construction phase, with officials anticipating a decrease once building ceases. “Sales tax at that level may be somewhat temporary,” remarked a chamber director to the Wall Street Journal.

      The state acknowledges the exchange. Meta made it clear that it would not proceed without incentives, according to Louisiana’s economic development leader. A lawyer involved in negotiating the deal was even more straightforward, stating, “We’re only offering this to attract them here. We aim not to provide them with a dollar more than necessary.”

      Who bears the cost for energy?

      Additionally, there is the matter of electricity supply. To accommodate Hyperion, Entergy is constructing new gas plants and 240 miles of transmission infrastructure, all financed by Meta. The company asserts that it bears the complete cost of energy and water, ensuring that residents are not burdened, and cites an agreement it claims will save Entergy customers over $2 billion.

      Consumer advocacy groups remain skeptical. Earthjustice has requested regulators to review Meta’s financing arrangement, under which it sold around 80 percent of the data center to a venture-debt firm. They warned that ratepayers could still end up bearing the costs. Regulators declined to initiate an investigation in February, a concern echoing previous issues surrounding Meta’s other campuses.

      A nationwide sentiment

      Richland Parish is not an isolated case. Microsoft, Google, and Amazon are pursuing similar tax incentives, with Amazon alone committing $12 billion to data centers in north-west Louisiana. This rush for land is widespread.

      However, resistance is also growing. A Gallup poll conducted in March indicated that seven out of ten Americans oppose having an AI data center in their vicinity, with more opposition than living near a nuclear facility. In April, Maine became the first state to prohibit large-scale data centers, while Scotland is considering a similar freeze. The costs associated with the AI surge are beginning to surface, and communities like Richland Parish are still determining who will ultimately pay the price.