Meta Data Center $30 Billion Blue Owl 'Benet Bonds' Fraudulent Accounting, Purchased by Blackrock
Meta's $30 billion investment in its data center was sold as "Benet Bonds," which were then used to cover operating expenses, revealing fraudulent accounting practices.
The "Benet Bonds," sold by a credit company to cover Meta's debt, were partially purchased by Blackrock, a private equity fund that had partnered with the Lee Jae-myung administration to establish an "AI Powerhouse Investment Fund."
The plunge in AI stocks on the New York Stock Exchange on the 17th was due to Blue Owl Capital's decision to cancel its investment in Oracle's data center construction project. Blue Owl previously replaced its investment in the Meta Data Center with a bond issue.
President Lee met with Blackrock's chairman immediately after arriving in New York for his UN speech on September 23rd, and met with OpenAI CEO Altman in the presidential office on October 1st.
Meta and Microsoft used this type of fraudulent accounting to rapidly expand computing power, then monitor evolving AI demand before committing to projects that could last decades, driving up their stock prices.
South Korea has emulated this strategy, implementing a 150 trillion won "AI Fund" strategy. With trillions of dollars at stake in data center investments and losses, tech companies have masked the risk of predicting how much computing power AI will require in the coming years with “special purpose companies” and fraudulent accounting.
If the large companies decide after the deal that they don’t actually need all that computing, smaller companies and their lenders will have to bear the consequences and are expected to be included in the Lee Jae-myung administration’s fund.
Regarding the $250 billion worth of computing power that OpenAI has pledged to invest in Microsoft, the New York Times reported on the 15th that “some of the computing power is supplied through a contract with CoreWeave, a neo-cloud provider, and OpenAI has committed to purchasing $22.4 billion worth of computing power directly from CoreWeave.”
However, CoreWeave already has billions of dollars in debt, much of it at interest rates exceeding 10%, meaning CoreWeave’s future is tied to OpenAI’s.” CoreWeave's Q3 (September 2025) financial report attributes 70% of its revenue to a single "Customer A," with no other company accounting for more than 10%.
Regarding the multibillion-dollar contracts announced this fall by Google, Meta, Microsoft, and others to lease computer power for their AI ambitions, the New York Times stated, "These contracts had one thing in common: they allowed companies with massive quarterly profits to reduce their financial exposure to the rapid global expansion of their data centers, signaling a new strategy by tech's biggest companies to shift some of the risks of the AI boom to startups."
Meta, which changed its accounting from "debt" to "operating expenses" by issuing disguised bonds through a special purpose vehicle, disguised 80% of its $30 billion as "benefits" and sold them on the market through a private credit agency.
The New York Times, which covered this process, reported that Mehta established a special purpose vehicle, Beignet Investors LLC, and partnered with private credit firm Blue Owl Capital to finance the project. Blue Owl would finance 80% of the data center construction, and under this agreement, Mehta changed the data center lease to a four-year lease.
This allowed Mehta to classify the $30 billion in funds as operating expenses rather than debt, according to its financial reports.
Blue Owl primarily financed the project, called Hyperion, through bonds issued by asset management firm Pimco. Pimco, in turn, sold "Beignet bonds" maturing in 2049 to clients including insurance companies, pension funds, endowments, and financial advisors.
BlackRock, a private equity firm linked to the Lee Jae-myung administration, also purchased some of the bonds.
As part of this deal, Metta doesn't have to pay a premium to Blue Owl to borrow money directly. Instead, Metta is lending risk, Solomon Feig, a private credit officer at Pinnacle Private Credit, told the Times.
"The core of Metta's strategy is to build as much as possible with what the industry calls 'Operating Percentage Money,' or OPM,'" Zacks Investment Research equity analyst Andrew Rocco told the Times.
If the AI boom slows, Metta could pull out of the contract in 2033, passing on the losses to the Bene bond buyers.
How much Metta would pay would depend on the circumstances.
Metta's credit company, Blue Owl, could find new customers or sell the project, but if AI demand wanes, the value of its data centers would decline.
The Times reported that ratings agency S&P Global said Metta would "pay enough cash to effectively repay the debt without ever officially putting it on its books." "Risk is like a tube of toothpaste," Shivaram Rajgopal, an accounting professor at Columbia Business School, told the New York Times. "You press here and it'll come out somewhere else. It's always in the system, it's just a question of where."
Professor Rajgopal continued, "This method is reminiscent of other investment booms that relied on private credit and special purpose vehicles, less transparent funding sources than the traditional banking sector."
He warned of a repeat of the dot-com bubble's fraudulent accounting practices, saying, "We thought we had solved the off-balance sheet problem, but in reality, it's the accounting methods banks used just before the dot-com bubble in the 2000s. It's like Groundhog Day all over again."
The New York Times reported that Mehta declined to comment.
"Groundhog Day" is a North American folklore celebration that occurs on February 2nd, a cold winter day, when squirrels, sensing the arrival of spring, startle and retreat back into their burrows, signaling that spring is still far away. In September, Microsoft signed a $17 billion deal with Nebius, a neocloud founded by the founder of Russian internet giant Yandex. In October, it secured a $23 billion data center commitment from Nscale, a privately held UK-based neocloud. In November, it signed a $10 billion deal with former Bitcoin miner Airen, and in November, it secured a multibillion-dollar deal with Lambda, another neocloud.
Microsoft executive Alistair Spears said in a statement, "Microsoft's global infrastructure approach is based on flexibility based on short-term and long-term demand signals we see from our customers." However, when asked about demand fluctuations, Microsoft CEO Satya Nadella said in April, "We don't want to be in a state of upside-down mode."
In contrast to these aggressive funding deals, Microsoft quietly began halting some development last fall. The New York Times reported, "The development pause coincides with the renegotiation of its relationship with OpenAI, a key AI partner." The paper added, "Microsoft, under an exclusive agreement with OpenAI, allows partners to source computing power from software companies like Oracle. Last fall, Microsoft began signing a series of short-term NeoCloud contracts, some of which represent the $250 billion worth of computing power OpenAI has agreed to send to Microsoft."
Microsoft and Google agreed to provide computing power to OpenAI, and OpenAI split some of that supply into a contract with CoreWeave, the largest NeoCloud provider.
OpenAI has signed a contract to purchase up to $22.4 billion in computing power directly from CoreWeave.
CoreWeave, a debt-ridden computing company, carries billions of dollars in debt, much of which showed interest rates of "over 10%" in its third-quarter financial report, and 70% of its revenue is attributed to a single "A" customer.
This effectively ties CoreWeave's debt crisis to OpenAI.
When asked by the New York Times about the OpenAI relationship, a CoreWeave spokesperson said, "No single customer is contractually responsible for more than 35% of future revenue," but declined to say how much computing power OpenAI will ultimately use.
"Industry experts say the cost of building AI has become so high that mitigating most risks is no longer feasible, so the tech giants are deploying it widely," Alex Flatt, an analyst at investment bank D.A. Davidson, told the Times. "They're very smart. There are only a handful of companies that can do that."
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