Meta, formerly known as Facebook, has built a massive global infrastructure of data centers to support its social media platforms and services. However, as Meta shifts its focus to building the metaverse and faces slowing revenue growth, there has been speculation that the company could reduce future data center construction.
Is Meta really going to stop building data centers?
While Meta has not made any official announcements about halting data center construction, there are some signs that the company may be slowing its infrastructure expansion:
- Meta’s capital expenditures dropped from $19.2 billion in 2020 to $18.6 billion in 2021 as growth slowed.
- The company has warned of increased costs in 2023 and plans to control expenses.
- Meta’s metaverse plans will require less infrastructure than its current social media businesses.
- The company has shifted focus away from expanding its user base towards serving existing users.
However, Meta has also reiterated its commitment to serving global users and continuing infrastructure investment. The company opened 11 new data centers in 2021 and has plans to open at least 10 more by 2024. While Meta’s data center construction may slow, there are no indications yet of a complete halt.
Why has Meta built so many data centers?
Meta has built over 20 massive data center complexes around the world to support its family of apps and services, including:
- Messenger
- Oculus
Some key reasons why Meta has relied on a vast global data center presence:
- Store the enormous volumes of data generated by billions of users
- Provide low latency access to apps and services worldwide
- Add redundancy to prevent service outages
- Comply with data residency laws requiring local data storage
- Support innovative new products like VR headsets
As Meta’s services have grown, it has had to continuously expand its data center capacity. Meta stated in 2017 that every day its data centers process over 500+ terabytes of data.
Where are Meta’s data centers located?
Meta currently has data centers located across the Americas, Asia Pacific, and EMEA regions. Some of the major data center locations include:
| USA | California, Iowa, Kansas, Nebraska, New Mexico, North Carolina, Oregon, Texas, Utah, Virginia |
| Europe | Denmark, Ireland, Netherlands, Sweden |
| Asia | Singapore, Taiwan |
| South America | Brazil, Chile |
Having data centers distributed around the world allows Meta to efficiently serve local user bases while meeting data locality requirements. The company plans all of its data center locations strategically.
What could make Meta stop building data centers?
While no announcements have been made, there are a few scenarios that could potentially cause Meta to halt future data center construction:
- Slowing revenue growth: Meta has faced declining ad revenue as competitors like TikTok gain share. Less revenue makes it harder to justify massive capital expenditures.
- Shift towards the metaverse: Meta’s pivot to developing the metaverse virtual world requires less infrastructure than social media.
- Political or reputational problems: Controversies like the Facebook Papers leaks could make it harder for Meta to expand data centers.
- Antitrust regulations: If regulators restrict how Meta handles user data, the data center needs could change.
However, given the continued importance of Meta’s apps globally, a full stoppage of new data centers seems unlikely in the near future.
Could Meta rely more on public cloud providers?
Meta could potentially start utilizing public cloud providers like Amazon Web Services (AWS) or Google Cloud more instead of building its own data centers. However, there are some key reasons why Meta has relied primarily on its own infrastructure:
- Scale – Meta’s data volumes are beyond what any public cloud can handle currently.
- Cost – At Meta’s size, its own data centers can be more cost effective.
- Control – Meta wants full control over the hardware and software for security and reliability reasons.
- Strategic asset – Meta’s data center technology gives it a competitive advantage.
While Meta will likely continue using some public cloud services, it seems improbable that it would ever shift its massive infrastructure fully to external cloud platforms. Meta needs autonomy over its infrastructure.
Could Meta downgrade or sell its data centers?
If Meta significantly reduces its data center capacity needs, it does have some options besides shutting down data centers entirely:
- Downgrade – Transition from custom designed facilities to more standard leased data centers.
- Sell – Sell data center campuses to investment firms or cloud competitors and lease back capacity.
- Repurpose – Redesign existing facilities for evolving business needs.
Selling data centers could allow Meta to gain significant capital to reinvest in new initiatives. However, the technical challenges involved in transitioning away from owned infrastructure mean any capacity downgrades would likely happen very gradually.
What technical challenges would downsizing data centers create?
While scaling down data center capacity may seem straightforward on the surface, in practice it would have significant technical repercussions:
- Migrating exabytes of stored user data from one data center to another is highly complex.
- Adjusting data distribution schemes to reduce the number of geographic locations can impact performance if not done carefully.
- Removing data centers requires reshuffling application deployments and traffic routing configurations.
- Meta relies heavily on custom data center designs using Open Compute hardware optimized for AI, which would be hard to replace.
- Security and privacy requirements make quickly transitioning user data difficult and risky.
Meticulous long-term planning would be needed to downgrade data center capacity without causing major technical disruptions. While achievable, the process could take many years.
Could reducing data center capacity impact users?
A noticeable drop in Meta’s data center capacity could negatively impact user experiences on its platforms:
- Slowdowns or more frequent outages if capacity is cut too much.
- Loss of low latency access to content and services for some geographic regions.
- Potential data privacy risks if data handling needs to change.
- Reduced ability to handle spikes in demand, like during major events.
However, Meta’s users have continued to grow rapidly despite its recent stagnant infrastructure expansion. The company could likely prolong building with minimal initial user impact. But performance and reliability may suffer over time as users increase.
Conclusion
While Meta is likely to slow its data center building cadence as its business evolves, a full stoppage seems unlikely in the near future given its still-massive infrastructure needs and user base. The technical challenges involved in downsizing capacity mean any reduction would happen gradually. Meta’s data centers are a strategic asset that give it a competitive edge. Despite increased costs, Meta will need to continue investing in its infrastructure for the foreseeable future, even if that investment decreases relative to its peaks. However, external factors like regulation or revenues could potentially force Meta’s hand in reducing infrastructure faster than it would like.