Meta Platforms is facing fresh scrutiny over its financial maneuvers, as its auditor Ernst & Young flagged the accounting treatment of a $27 billion data-center project as a “critical audit matter” in the company’s latest annual report, highlighting the challenges in determining control over the off-balance-sheet joint venture.
While EY ultimately approved Meta’s decision to keep the Hyperion data-center project off its books, the firm noted in the report that auditing this assertion “was especially challenging due to the significant judgment required in determining the activities that most significantly affect the VIE’s economic performance.” Such designations for specific, high-profile transactions are rare at major audit clients, underscoring the complexity and risk involved.
Meta transferred the Hyperion project off its balance sheet in October 2025 into a new joint venture with Blue Owl Capital, where Meta holds a 20% stake and Blue Owl-managed funds own the remaining 80%. The venture, classified as a variable interest entity (VIE), issued a record $27.3 billion in bonds through a holding company called Beignet Investor, which owns Blue Owl’s portion. Meta determined it is not the “primary beneficiary” of the VIE, allowing it to exclude the venture’s assets and liabilities from its balance sheet.
The move has drawn criticism from investors and lawmakers, who argue that Meta’s expertise in AI data centers gives it de facto control despite the structure, potentially obscuring the company’s true financial picture. Four Democratic senators, including Elizabeth Warren, sent a letter on January 22, 2026, to the Financial Stability Oversight Council (FSOC), led by Treasury Secretary Scott Bessent, urging an investigation into the risks posed by AI-related debt. The lawmakers described such financing arrangements as “convoluted and opaque,” making it easier to hide balance-sheet realities, and cited Meta’s joint venture as a prime example.
This isn’t Meta’s first brush with accounting questions; the company’s aggressive infrastructure spending on AI has ballooned, with capital expenditures reaching $40 billion in 2025 alone, fueling concerns over sustainability and transparency.
As Big Tech’s AI arms race intensifies, Meta’s off-balance-sheet tactics could invite further regulatory probes, especially amid broader debates on how companies account for massive data-center investments in an era of escalating energy and financial demands.
