The American technology company Meta is considering a new stock issuance with the goal of raising tens of billions of dollars to finance the ambitious artificial intelligence development plans of its founder and CEO, Mark Zuckerberg.
According to sources from the Financial Times, the company – owner of Facebook, Instagram, WhatsApp and more – is exploring “creative” ways to raise new capital after Alphabet – the parent company of Google, also engaged in the artificial intelligence race – recently closed a stock sale worth $85 billion, a record.
WHY DOES META NEED MONEY?
Meta and other tech companies need money to support the enormous costs of developing artificial intelligence, which requires energy-intensive facilities (the so-called data centers) and specialized microchips to carry out the training and operation of models. At the moment, in fact, the competition among companies in the sector is not so much about software, but primarily about owning the physical infrastructure that provides the computing power necessary to develop increasingly advanced models and meet the demands of large masses of users.
ZUCKERBERG’S “PERSONAL SUPER-INTELLIGENCE”
For 2026, Meta plans to increase capital expenditure related to artificial intelligence to $145 billion, and aims to go even higher in 2027. These investments are intended to realize Zuckerberg’s vision for “personal super-intelligence,” that is, the integration of AI-based assistants within the company’s platforms (Facebook, Instagram, and WhatsApp) and wearable devices (such as “smart glasses,” or smart glasses, among others).
HOW THE OPERATION WOULD WORK
Although capital is needed, it is not certain that Meta will proceed with the stock issuance. According to sources from the Financial Times, the company is considering several options including so-called mandatory convertible preferred shares: to simplify greatly, this is a hybrid form of financing because it allows the company to obtain liquidity immediately, but postpones – even for years – the conversion of these preferred shares into existing shares, thus limiting capital dilution for existing investors.
THE SITUATION OF META (AND OTHER BIG TECH)
In recent years, precisely due to the race for artificial intelligence, Meta has changed its financial structure: until 2022 it had long-term debt below $10 billion, while recently it has taken on loans amounting to $55 billion. Last October, it also raised $27 billion through a bond issuance via a joint venture with the private equity fund Blue Owl: the funds will be used to build a large data center in Louisiana, called Hyperion.
Also with the aim of conserving financial resources, Meta has laid off eight thousand employees, suspended hiring for six thousand positions, and halted share buybacks (a practice it had regularly carried out since 2017).
Google, moreover, has also suspended its buyback program. Analysts consulted by the Financial Times also believe that Microsoft and Amazon might consider selling their own shares to offset the increased spending on artificial intelligence infrastructure.
