Meta is making big inroads into AI, creating a new class of stocks that can pay for it.
On Wednesday, as the company announced its third-quarter results, Semaphore reported that the company may issue non-voting stock, or shares that don’t give owners the right to vote on company decisions, to fund its artificial intelligence efforts.
During Meta’s earnings call, the company confirmed the report. Susan Lee, Meta’s chief financial officer, said the company plans to “create a new type of non-voting capital stock and distribute it to all existing shareholders through stock dividends.”
Lee later added that the company “created this new class of stock for the purpose of preserving the voting rights of existing Class A and Class B stockholders while creating non-voting public stock that could be used for capital raising, employee compensation, acquisitions, and other general corporate purposes.”
He added that the shares will allow the company to maintain its current “founder-led structure.” “Funding tools will also be expanded, giving you the flexibility to invest against the backdrop of the unprecedented momentum we are seeing across all parts of our business with AI.”
Meta’s earnings for the quarter were strong, beating Wall Street expectations. The company’s sales were $64 billion, an increase of 26% from the same period last year. However, costs and expenses also increased by 68% year over year.
Reality Labs, Meta’s division responsible for AR glasses, VR headsets, and VR software, continues to lose money, although not as much as in the past. The company said in its earnings report that it expects the division’s losses to narrow to between $18 billion and $19 billion from 2025 levels.
Meta has made a big push into AI over the past year. The company released several AI models earlier this year, including Muse Spark and Muse Glimmer. In recent weeks, we’ve added Muse Wonder and Muse Spark Open. This is an open-weight model, meaning its underlying parameters are exposed for outsiders to use and build upon. Meta also launched a coding agency for software developers called Muse Code. At this year’s Meta Connect event, the company announced a new line of cute and cuddly avatars for its AI assistant, Meta Muse, to make its AI services more relatable (and memeable).
As far as we can tell, these AI products are doing well. “In just a month and a half, more than 10 million people in the U.S. and Canada have established a Muse personal agency,” CEO Mark Zuckerberg said during an earnings call Wednesday. “Growth continues to be strong, reaching #1 in the App Store almost every day.”
Zuckerberg added, “Now that we have a clear product-market fit for Muse, we are entering a new phase, a more operational phase focused on scaling,” and later claimed that the company expects to increase the product’s appeal and ultimately “serve billions of people.”
The company also noted that certain storm clouds remain on the horizon in the form of ongoing regulatory and legal issues. “We continue to monitor ongoing legal and regulatory matters that could materially impact our business and financial results,” Lee said. “For example, youth-related issues continue to come under intense scrutiny in several markets, and a number of youth-related court cases are scheduled in the United States in the coming months.”
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