Meta to raise up to US$95 billion in equity to fund costly AI expansion

META Platforms said on Monday (Oct 26) it plans to raise up to US$95 billion in equity to fund its costly AI-related expansion of data centres, cloud computing power and other infrastructure.

The company launched public offerings of about US$35 billion in common stock and convertible preferred stock. It also said it plans to launch a separate at-the-market share sale programme of up to US$60 billion after its new non-voting Class C shares begin trading, which is expected in the first quarter of 2027.

Meta has stepped up spending on data centres, computing capacity and AI products to compete with rival AI heavyweights OpenAI and Anthropic.

The social media company had cash, cash equivalents and marketable securities of US$82.45 billion, slightly exceeding its long-term debt of US$80.92 billion as of Sep 30, according to its quarterly filing from last week.

The company has committed to spend about US$825 billion in the future, primarily driven by its growing investments in data centres, AI-related infrastructure and cloud computing power.

Meta said chip companies Nvidia, Advanced Micro Devices and Broadcom have expressed interest in purchasing up to US$5 billion of Meta’s Class A common stock in the offering.

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Last week, Meta raised the lower end of its annual spending forecast, now expecting capital expenditure to be between US$135 billion and US$145 billion this year, up from US$130 billion to US$145 billion expected previously.

Meta reported a US$2.12 billion cash burn in the third quarter, marking its first negative free cash flow in over ten years, compared with a positive cash flow of US$10.63 billion a year ago.

The company reported third-quarter revenue of US$64.6 billion, ahead of Wall Street estimates of US$63.37 billion. It also projected fourth-quarter revenue between US$73 billion and US$76 billion. REUTERS