Meta announced Monday that it plans to raise a total of $95 billion to support investments in artificial intelligence infrastructure and superintelligence.
The stock price fell 1.6% in morning trading after the announcement. Nvidia, advanced micro device and broadcom Mehta said in a statement that he is interested in purchasing up to $5 billion in stock.
The tech giant plans to initially raise $35 billion in an underwritten public stock offering, followed by an additional $60 billion in an on-market program.
The news comes as hyperscalers pour record amounts into building AI infrastructure. Goldman Sachs estimates that AI-related capital spending could total about $7.6 trillion from 2026 to 2031, including computing, data centers, and power.
Meta’s planned investments will support “new AI opportunities” including its family of apps, its AI agent Muse, and its data center business, the company announced on Monday.
The company plans to balance financing these investments through a combination of operating cash flow, investment grade debt, partnerships and equity capital.
Meta-racing to protect your AI infrastructure
Meta is one of the major hyperscalers that is increasingly using debt to fund the expensive infrastructure needed for the AI boom.
Meta last week reported third-quarter results in which sales rose 26% year-over-year to $64.6 billion, compared to analysts’ expectations of $63.37 billion. However, investors focused more on the tech company’s negative free cash flow and its forecast for higher capital spending for the year.
The company now expects full-year capital spending to be in the range of $135 billion to $145 billion, up from the lower end of the range of $130 billion. Meta stock fell on Thursday as a result.
Meta is building four “superclusters” with more than 1 gigawatt of capacity each, and plans to nearly double its total infrastructure capacity by 2026 compared to the previous year, the company said.
Ben Wood, senior partner at CCS Insight, told CNBC that the decision to raise more capital “reflects the impressive level of investment needed to stay in the AI arms race.”
“Meta will offer more equity at a time when many companies such as Google, SpaceX, and soon Anthropic are entering the market to raise capital.”
Google’s parent company Alphabet said in June it aims to raise $85 billion. SpaceX has completed a $40 billion debt financing to purchase graphics processing equipment. Anthropic is preparing for an initial public offering.
TikTok US is looking to secure several gigawatts of computing power over the next few years, CNBC reported on Friday.
